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https://www.irs.gov/newsroom/treasury-and-irs-announce-guidance-on-wage-and-apprenticeship-requirements-for-enhanced-credits-deductions

IR-2022-208, November 29, 2022 WASHINGTON — The Treasury Department and Internal Revenue Service today announced guidance providing taxpayers information on how to satisfy the prevailing wage and apprenticeship requirements for enhanced tax benefits under the Inflation Reduction Act. The guidance will be published in the Federal Register tomorrow. Notice 2022-61 explains how taxpayers – generally builders, developers, and owners of clean energy facilities – receive the increased tax credits or deduction amounts by satisfying the wage and apprenticeship requirements as provided for in this notice. For instance, the notice provides guidance on what constitutes a prevailing wage and the determination of qualified apprenticeships with accompanying examples. The publication of this notice in tomorrow's Federal Register begins the 60-day period in which taxpayers must begin construction of a facility (or installation under the rules for expensing energy efficient commercial building property) to receive the enhanced tax benefits without satisfying the prevailing wage and apprenticeship requirements as described in this notice. Finally, this notice provides guidance for determining the "beginning of construction" (and "installation" for purposes of the rules for deductions for the cost of energy efficient commercial building property placed in service during the tax year).

https://www.irs.gov/newsroom/irs-hosts-first-centralized-national-virtual-settlement-event-helping-more-taxpayers-settle-tax-court-cases

IR-2022-207, November 29, 2022 WASHINGTON — The Internal Revenue Service announced today that the IRS Office of Chief Counsel partnered with the American Bar Association Tax Section to hold its first centralized National Virtual Settlement Event. This four-day event was inspired by the monthlong virtual event held in March 2021 during the height of the COVID-19 pandemic. Over the course of four days, an exceptional number of cases were settled: a total of 44. There were at least 59 meetings from October 24 through October 27 that included taxpayers, pro bono attorneys and representatives of the IRS Office of Chief Counsel. In contrast to past Settlement Day events that are generally organized locally for taxpayers with a nearby place of trial, this one was organized at the national level to support unrepresented taxpayers who may not be able to attend a local event. "This groundbreaking event provided an easier process for taxpayers to get their cases settled," said Acting Commissioner Doug O'Donnell. "We are proud of the IRS Office of Chief Counsel for being innovative and making it more convenient to those who may not be able to attend a local event." The event took place in close coordination between the Tax Section of the ABA which was celebrating its annual Pro Bono Week, and local Low Income Taxpayer Clinics. More than 75 volunteers from the ABA Tax Section, including numerous Low Income Taxpayer Clinics and private pro bono attorneys, provided free legal support. IRS Revenue Officers and Tax Computations Specialists further supported this event by explaining collection options and generating settlement computations. The National Virtual Settlement event does not replace local or in-person Settlement Day events but instead offers taxpayers greater access to free legal advice and support for their Tax Court cases. Settlement Day events are coordinated efforts to resolve cases in the United States Tax Court by providing taxpayers not represented by counsel the opportunity to receive free tax advice from Low Income Taxpayer Clinics, ABA volunteer attorneys and other pro bono organizations. Taxpayers can also discuss their Tax Court cases and resolve related tax issues with members of the IRS Office of Chief Counsel and IRS Collection. By doing so, unrepresented taxpayers are often able to amicably settle their tax disputes without a trial.

https://www.irs.gov/newsroom/interest-rates-increase-for-the-first-quarter-of-2023

IR-2022-206, November 29, 2022 WASHINGTON — The Internal Revenue Service today announced that interest rates will increase for the calendar quarter beginning January 1, 2023. For individuals, the rate for overpayments and underpayments will be 7% per year, compounded daily, up from 6% for the quarter that began on October 1. Here is a complete list of the new rates: 7% for overpayments (payments made in excess of the amount owed), 6% for corporations. 4.5% for the portion of a corporate overpayment exceeding $10,000. 7% for underpayments. (taxes owed but not fully paid) 9% for large corporate underpayments. Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points. Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point. The interest rates announced today are computed from the federal short-term rate determined during October 2022. See the revenue ruling for details. Revenue Ruling 2022-23PDF announcing the rates of interest will appear in Internal Revenue Bulletin 2022-51, dated December 19, 2022.

https://www.irs.gov/newsroom/national-tax-security-awareness-week-giving-tuesday-highlights-that-scammers-may-use-phony-charities-to-trick-taxpayers

IR-2022-205, November 29, 2022 WASHINGTON — On Giving Tuesday, the Internal Revenue Service and its Security Summit partners warned taxpayers to be on alert for scammers using fake charities to commit fraud not just during the holiday season but year-round. On day two of Nationwide Tax Security Awareness Week, the IRS and its Security Summit partners urge people to make sure their money goes only to legitimate charities. Being alert to potential scams will not only shield a taxpayer's money but also help protect personal and financial data that can be used in tax-related identity theft. "People should watch out for fake charities, which create problems on multiple fronts," said IRS Acting Commissioner Doug O'Donnell. "Not only can well-intentioned donors lose out on their money and a potential charitable donation credit, but their personal financial information could also be stolen. We urge people to act carefully before they give, including following several tips to make sure the charity is legitimate." Working together as the Security Summit, the IRS, state tax agencies and the nation's tax software and tax professional industries are providing tips this week to help protect people against identity theft as well as help safeguard sensitive tax information that criminals can use to try to file fake tax returns and obtain refunds. This effort is part of National Tax Security Awareness Week, now in its seventh year. Scammers often take advantage of people's generosity by setting up fake charities to trick unsuspecting donors into giving away not only money, but also their sensitive personal information. They can use the holiday season and other timely events, such as recent disasters, to try to reach out to people and lure them into a donation. Scams requesting donations for disaster relief efforts are especially common over the phone. However, scammers also use emails, text messages, websites and social media messages that mimic a legitimate charity to trick people into giving money or personal information. The IRS and its Security Summit partners urge people to make sure their money goes only to legitimate charities. Being alert to potential scams will not only shield a taxpayer's money but also help protect personal and financial data that can be used in tax-related identity theft. Tips to avoiding fake charity scams: Don't give in to pressure. Scammers often use the technique of urgent need to pressure people into making an immediate payment. Legitimate charities are happy to get a donation at any time, there's no rush. Donors are encouraged to take time to do their own research. Don't forget that scammers may alter or "spoof" their caller ID to make it look like a real charity. Be wary about how a donation is requested. Taxpayers shouldn't work with charities that ask for donations by giving numbers from a gift card or by wiring money. That's a scam. It's safest to pay by credit card or check — and only after researching the charity.  Don't give more than needed. Scammers are seeking money, but personal information can be just as valuable. Taxpayers should treat personal information like cash and not hand it out to just anyone. Never give out Social Security numbers, credit card numbers or PIN numbers. Donors should only give limited financial information when the person is sure the charity is legitimate. Taxpayers who give money or goods to a charity may be able to claim a deduction on their federal tax return by reducing the amount of their taxable income if they itemize and don't take the standard deduction. However, for people itemizing to receive a deduction, taxpayers must donate to a qualified charity. This is the second part of a week-long series of tips to raise awareness about identity theft, which will feature educational materials to help protect individuals, businesses and tax professionals from identity theft. The effort includes a webinar today titled Deeper Dive Into Emerging Cyber Crimes and Crypto Tax Compliance, special informational graphics and a social media effort on Twitter, Facebook and YouTube. Follow @IRSTaxSecurity, @IRSnews and #TaxSecurity on Twitter for the latest information. See IRS.gov/securitysummit for more details.

https://www.irs.gov/newsroom/irs-security-summit-partners-begin-national-tax-security-awareness-week-urge-people-to-watch-out-for-holiday-scams-and-protect-personal-information-as-tax-season-nears

IR-2022-204, November 28, 2022 WASHINGTON — On Cyber Monday, the Internal Revenue Service and the Security Summit partners kicked-off the 7th National Tax Security Awareness Week with information for taxpayers and tax professionals on how to avoid scams and protect sensitive personal information. With the holiday season now in full swing, the period presents a prime opportunity for identity thieves to try stealing personal financial information, which also could be used to potentially file fraudulent tax returns. People can face risks if they're shopping online and using publicly accessible Wi-Fi. And the Summit reminds people that fictitious text scams with "smishing" schemes continue during this period. "With holiday shopping starting and the 2023 tax season quickly approaching, many people will be using laptops and personal devices to share sensitive financial information," said IRS Acting Commissioner Doug O'Donnell. "In the months ahead, these same devices will be used to complete millions of tax returns by both taxpayers and tax professionals, making the holiday season the perfect time to take steps to protect your valuable information and watch out for scams." Formed in 2015, the Security Summit partnership between the IRS, state tax administrators and the tax software and tax professional community have worked together to improve defenses and protect people from tax-related identity theft. As part of that effort, the Summit partners worked to raise taxpayer and tax professional awareness about security issues – not only protecting people from the risk of identity theft but helping protect the nation's tax system from refund-related fraud. The Summit partners urged people to take extra care while shopping online or viewing emails and texts, especially during the holiday season when criminals are very active. The Security Summit reminds everyone to stay safe while holiday shopping with the following considerations: Shop at sites where the web address begins with "https" – the "s" is for secure communications and look for the "padlock" icon in the browser window. Don't shop on unsecured public Wi-Fi in places like a mall. Keep security software for computers, tablets and mobile phones updated. Protect the devices of family members, including young children, older adults as well as less technologically savvy users. Make sure anti-virus software for computers has a feature to stop malware, and that there is a firewall enabled that can prevent intrusions. Use strong and unique passwords for online accounts. Use multi-factor authentication whenever possible. It helps prevent thieves from easily hacking accounts. The IRS also reminds people about advice from the Federal Trade Commission to never buy anything from online sellers that accept payment only by gift cards, money transfers through companies like Western Union or MoneyGram or cryptocurrency. Payments you make that way are nearly impossible to trace and reverse. Scammers often tell people to use those payment methods so they can get money quickly. Additionally, the IRS warned taxpayers of a recent increase in IRS-themed texting scams aimed at stealing personal and financial information. During 2022, the IRS identified and reported thousands of fraudulent domains tied to multiple MMS/SMS/text scams (known as smishing) targeting taxpayers. Smishing campaigns target mobile phone users, and the scam messages often look like they're coming from the IRS, offering lures like fake COVID relief, tax credits or help setting up an IRS online account. Recipients of these IRS-related scams can report them to phishing@irs.gov. Stolen data can be used to file fraudulent tax returns that make it more difficult for the IRS and the states to detect because the fraudulent returns use real financial information. Other data thieves sell the basic tax preparer or taxpayer information on the web so other fraudsters can try filing fraudulent tax returns. Given the rise of texting scams, taxpayers can check out security recommendations for their specific mobile phone by reviewing the Federal Communications Commission's Smartphone Security Checker. Since phones are used for shopping and even for doing taxes, remember to make sure phones and tablets are just as secure as computers. Additional tips for tax professionals, business and people working from home Earlier this year the Protect Your Clients; Protect Yourself campaign encouraged tax professionals to focus on fundamentals and to watch out for emerging vulnerabilities being seen for those practitioners using cloud-based services for their practice. Scammers either trick or hack their way into tax professionals' computer systems to access client data. Even when tax pros think they have client data stored in a secure cloud, lack of strong authentication can make this information vulnerable. Additional considerations for businesses and those working from home include: Use separate personal and business computers, mobile devices and email accounts. Do not send sensitive business information to personal email devices. Do not conduct business, including online business banking, on a personal computer or device. Do not engage in web surfing, gaming or video downloading on business computers or devices. Do not share USB drives or external hard drives between personal and business computers or devices. Never connect an unknown/untrusted piece of hardware into the system or network. Change passwords often. Every three months is recommended. Consider using a password management application to store passwords. Passwords to devices and applications that contain business information should not be reused. This is the first in a series of press releases highlighting the Summit partner's National Tax Security Awareness Week from November 28 through December 2, which will feature a week-long series of educational materials to help protect individuals, businesses and tax professionals from identity theft. The effort includes a November 29 webinar titled Deeper Dive Into Emerging Cyber Crimes and Crypto Tax Compliance, special informational graphics and a social media effort on Twitter, Facebook and YouTube. Follow @IRSTaxSecurity, @IRSnews and #TaxSecurity on Twitter for the latest information. Additional resources for tax professionals In addition to reviewing IRS Publication 4557, Safeguarding Taxpayer DataPDF, tax professionals can also get help with security recommendations by reviewing Small Business Information Security: The FundamentalsPDF by the National Institute of Standards and Technology. The IRS Identity Theft Central pages for tax pros, individuals and businesses have important details as well. Publication 5293, Data Security Resource Guide for Tax ProfessionalsPDF, provides a compilation of data theft information available on IRS.gov.

https://www.irs.gov/newsroom/get-ready-now-to-file-your-2022-federal-income-tax-return

IR-2022-203, November 22, 2022 WASHINGTON — The Internal Revenue Service today encouraged taxpayers to take simple steps before the end of the year to make filing their 2022 federal tax return easier. With a little advance preparation, a preview of tax changes and convenient online tools, taxpayers can approach the upcoming tax season with confidence. Filers can visit the Get Ready webpage to find guidance on what’s new and what to consider when filing a 2022 tax return. They can also find helpful information on organizing tax records and a list of online tools and resources. Get Ready by gathering tax records When filers have all their tax documentation gathered and organized, they’re in the best position to file an accurate return and avoid processing or refund delays or receiving IRS letters. Now’s a good time for taxpayers to consider financial transactions that occurred in 2022, if they’re taxable and how they should be reported. The IRS encourages taxpayers to develop an electronic or paper recordkeeping system to store tax-related information in one place for easy access. Taxpayers should keep copies of filed tax returns and their supporting documents for at least three years. Before January, taxpayers should confirm that their employer, bank and other payers have their current mailing address and email address to ensure they receive their year-end financial statements. Typically, year-end forms start arriving by mail or are available online in mid-to-late January. Taxpayers should carefully review each income statement for accuracy and contact the issuer to correct information that needs to be updated. Get Ready for what’s new for Tax Year 2022 With the end of the year approaching, time is running out to take advantage of the Tax Withholding Estimator. This online tool is designed to help taxpayers determine the right amount of tax to have withheld from their paycheck. Some people may have life changes like getting married or divorced, welcoming a child or taking on a second job. Other taxpayers may need to consider estimated tax payments due to non-wage income from unemployment, self-employment, annuity income or even digital assets. The last quarterly payment for 2022 is due on January 17, 2023. The Tax Withholding Estimator can help wage earners determine if there is a need to adjust their withholding, consider additional tax payments, or submit a new W-4 form to their employer to avoid an unexpected tax bill when they file. As taxpayers gather tax records, they should remember that most income is taxable. This includes unemployment income, refund interest and income from the gig economy and digital assets.  Taxpayers should report the income they earned, including from part-time work, side jobs or the sale of goods. The American Rescue Plan Act of 2021 lowered the reporting threshold for third-party networks that process payments for those doing business. Prior to 2022, Form 1099-K was issued for third-party payment network transactions only if the total number of transactions exceeded 200 for the year and the aggregate amount of these transactions exceeded $20,000. Now a single transaction exceeding $600 can trigger a 1099-K. The lower information reporting threshold and the summary of income on Form 1099-K enables taxpayers to more easily track the amounts received. Remember, money received through third-party payment applications from friends and relatives as personal gifts or reimbursements for personal expenses is not taxable. Those who receive a 1099-K reflecting income they didn’t earn should call the issuer. The IRS cannot correct it. Credit amounts also change each year like the Child Tax Credit (CTC), Earned Income Tax Credit (EITC) and Dependent Care Credit. Taxpayers can use the Interactive Tax Assistant on IRS.gov to determine their eligibility for tax credits. Some taxpayers may qualify this year for the expanded eligibility for the Premium Tax Credit, while others may qualify for a Clean Vehicle Credit through the Inflation Reduction Act of 2022. Refunds may be smaller in 2023. Taxpayers will not receive an additional stimulus payment with a 2023 tax refund because there were no Economic Impact Payments for 2022. In addition, taxpayers who don’t itemize and take the standard deduction, won’t be able to deduct their charitable contributions. The IRS cautions taxpayers not to rely on receiving a 2022 federal tax refund by a certain date, especially when making major purchases or paying bills. Some returns may require additional review and may take longer. For example, the IRS and its partners in the tax industry, continue to strengthen security reviews to protect against identity theft. Additionally, refunds for people claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) can’t be issued before mid-February. The law requires the IRS to hold the entire refund – not just the portion associated with EITC or ACTC. This law helps ensure taxpayers receive the refund they're due by giving the IRS time to detect and prevent fraud. For taxpayers who are still waiting for confirmation that last year’s tax return processed, or for a tax year 2021 refund or stimulus payment to process, their patience is appreciated. As of November 11, 2022, the IRS had 3.7 million unprocessed individual returns received this year. These include tax year 2021 returns and late filed prior year returns. Of these, 1.7 million returns require error correction or other special handling, and 2 million are paper returns waiting to be reviewed and processed. They also had 900,000 unprocessed Forms 1040-X for amended tax returns. The IRS is processing these amended returns in the order received and the current timeframe can be more than 20 weeks. Taxpayers should continue to check Where's My Amended Return? for the most up-to-date processing status available. Renew expiring tax ID numbers Taxpayers should ensure their Individual Tax Identification Number (ITIN) hasn’t expired before filing a 2022 tax return. Those who need to file a tax return, should submit a Form W-7, Application for IRS Individual Taxpayer Identification Number now, to renew their ITIN. Taxpayers who fail to renew an ITIN before filing a tax return next year could face a delayed refund and may be ineligible for certain tax credits. Applying now will help avoid the rush as well as refund and processing delays in 2023. Bookmark the following tools on IRS.gov Online tools are easy to use and available to taxpayers 24 hours a day. They provide key information about tax accounts and a convenient way to pay taxes. IRS.gov provides information in many languages and enhanced services for people with disabilities, including the Accessibility Helpline. Taxpayers who need accessibility assistance may call 833-690-0598. Taxpayers should use IRS.gov as their first and primary resource for accurate tax information. Let Us Help You page. The Let Us Help You page on IRS.gov has links to information and resources on a wide range of topics. Online Account. An IRS online account lets taxpayers securely access their personal tax information, including tax return transcripts, payment history, certain notices, prior year adjusted gross income and power of attorney information. Filers can log in to verify if their name and address is correct. They should notify IRS if their address has changed. They must notify the Social Security Administration of a legal name change to avoid a delay in processing their tax return. IRS Free File. Almost everyone can file electronically for free on IRS.gov/freefile or with the IRS2Go app. The IRS Free File program, available only through IRS.gov, offers brand-name tax preparation software packages at no cost. The software does all the work of finding deductions, credits and exemptions for filers. It‘s free for those who qualify. Some Free File packages offer free state tax return preparation. Those who are comfortable preparing their own taxes can use Free File Fillable Forms, regardless of their income, to file their tax return either online or by mail. Find a tax professional. The Choosing a Tax Professional page on IRS.gov has a wealth of information to help filers choose a tax professional. In addition, the Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help taxpayers find preparers in their area who hold professional credentials recognized by the IRS, or who hold an Annual Filing Season Program Record of Completion. Interactive Tax Assistant. The Interactive Tax Assistant is a tool that provides answers to many tax questions. It can determine if a type of income is taxable and eligibility to claim certain credits or deductions. It also provides answers for general questions, such as determining filing requirement, filing status or eligibility to claim a dependent. Where's My Refund? Taxpayers can use the Where’s My Refund? tool to check the status of their refund. Current year refund information is typically available online within 24 hours after the IRS receives an e-filed tax return. A paper return status can take up to four weeks to appear after it is mailed. The Where’s My Refund? tool updates once every 24 hours, usually overnight, so filers only need to check once a day. Volunteer Income Tax Assistance. The Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs offer free basic tax return preparation to qualified individuals. Get refunds fast with Direct Deposit Taxpayers should prepare to file electronically and choose Direct Deposit for their tax refund – it’s the fastest and safest way to file and get a refund. Even when filing a paper return, choosing a direct deposit refund can save time. For those who do not have a bank account, the FDIC website offers information to help people open an account online. Taxpayers can download Publication 5349, Tax Preparation is for EveryonePDF, for more information to help them get ready to file.

https://www.irs.gov/newsroom/security-summit-focuses-special-week-on-identity-theft-to-protect-taxpayers-tax-professionals-as-holiday-and-tax-seasons-approach

IR-2022-202, November 18, 2022 WASHINGTON — The Internal Revenue Service, along with state tax agencies and the nation's tax industry, today announced a special week focusing attention on empowering taxpayers to protect sensitive financial information against identity thieves as the holidays and the 2023 tax season get closer. Now in its seventh year, the annual National Tax Security Awareness Week takes place from November 28 - December 2. The event is part of a larger effort that continues by the Security Summit, the coalition of the IRS, the states and the nation's tax software and tax professional community. The group formed in 2015 to combat tax-related identity theft by strengthening protections against fraud and raising security awareness. With the holidays and tax season approaching, the Summit partners warned taxpayers and tax professionals to take extra steps to protect their financial and tax information. People face a heightened risk in coming months as fraudsters take advantage of the holiday season to trick people into sharing sensitive personal information by email, text message and online. Identity thieves use that information to try to file tax returns and steal refunds. To help combat this, the Summit partner's National Tax Security Awareness Week will feature a week-long series of educational materials to help protect individuals, businesses and tax professionals from identity theft. The effort will include a November 29 webinar titled Deeper Dive Into Emerging Cyber Crimes and Crypto Tax Compliance, special informational graphics and a social media effort on Twitter, Facebook and YouTube. Follow @IRSTaxSecurity, @IRSnews and #TaxSecurity on Twitter for the latest information. "Taxpayers and tax professionals need to remain vigilant for increasingly sophisticated scams that look to steal sensitive financial information," said IRS Acting Commissioner Doug O'Donnell. "The Security Summit effort focuses on highlighting simple steps that small businesses and people in all walks of life can take to protect their information, helping them avoid problems at tax time." The IRS and Summit partners continue to see constantly evolving threats and scams. They mimic IRS and others in the tax community through fake emails, texts and online scams. These schemes frequently use recent tragedies or charitable groups to coax people into sharing sensitive financial data. "The heightened risk to taxpayers poses a real threat. The criminals continue to evolve and are always looking for opportunities to fraudulently obtain this information," said Neena Savage, President of the Board of Trustees for the Federation of Tax Administrators and Tax Administrator for Rhode Island. "We urge everyone to take the steps necessary to protect their sensitive information, which simultaneously helps strengthen the joint work conducted by the states, the IRS and the tax industry through the Security Summit partnership." As Security Summit partners increased their joint defenses against identity theft in recent years, including through the Identity Theft Information Sharing and Analysis Center (ISAC), fraudsters have increasingly looked for ways to obtain sensitive personal financial information to help slip past common defenses. That has made tax professionals – who hold valuable tax information for their clients – a tempting target for scam artists. "The innovative Summit partnership between the public and private sectors has created important protections against tax-related identity theft,' said Julie Magee, Tax Regulatory Lead at Cash App Taxes and an original member of the Security Summit who currently serves as the group's communications co-chair. "This collaborative effort continues to thwart identity thieves, helping protect taxpayers and tax professionals while also safeguarding the federal and state tax systems essential to running our nation." With International Fraud Awareness Week underway through November 19 this year, the Security Summit offers a preview of the upcoming National Tax Security Awareness Week that begins November 28. National Tax Security Awareness Week 2022 highlights Cyber Monday: Protect personal and financial information online The IRS and the Security Summit partners remind people to take these basic steps when shopping online: Use security software for computers and mobile phones – and keep it updated. Make sure anti-virus software for computers has a feature to stop malware, and that there is a firewall enabled that can prevent intrusions. Use strong and unique passwords for all accounts. Use multi-factor authentication whenever possible. Shop only secure websites; look for the "https" in web addresses and the padlock icon; avoid shopping on unsecured and public Wi-Fi in places like coffee shops, malls or restaurants. Tax professionals should review their security protocols As identity thieves continue targeting tax professionals, the IRS and the Summit partners urge practitioners to review the "Taxes-Security-Together" Checklist, including: Deploy basic security measures. Use multi-factor authentication to protect tax software accounts. Create a Virtual Private Network if working remotely. Create a written data security plan as required by federal law. Know about phishing and phone scams. Create data security and data theft recovery plans. Get an Identity Protection PIN Taxpayers who can verify their identities online may opt into the IRS IP PIN program – a tool taxpayers can use to protect themselves – and their tax refund. Here's what taxpayers need to know: The Identity Protection PIN or IP PIN is a six-digit code known only to the individual and the IRS. It provides another layer of protection for taxpayers' Social Security numbers on tax returns. Use the Get an Identity Protection PIN (IP PIN) tool at IRS.gov/ippin to immediately get an IP PIN. Never share the IP PIN with anyone but a trusted tax provider. Businesses should watch out for tax-related scams and implement safeguards Most cyberattacks are aimed at small businesses with fewer than 100 employees. Some details from this segment include: Learn about best security practices for small businesses. IRS continues protective masking of sensitive information on business transcripts. A Business Identity Theft Affidavit, Form 14039-B, is available for businesses to report theft to the IRS. Beware of various scams, especially the W-2 scam that attempts to steal employee income information. Check out the "Business" section on IRS's Identity Theft Central. Earlier this year, the Protect Your Clients; Protect Yourself campaign encouraged tax professionals to focus on fundamentals and to watch out for emerging vulnerabilities for those practitioners using cloud-based services for their practice. Additional resources In addition to reviewing IRS Publication 4557, Safeguarding Taxpayer DataPDF, tax professionals can also get help with security recommendations by reviewing Small Business Information Security: The FundamentalsPDF by the National Institute of Standards and Technology. The IRS Identity Theft Central pages for tax pros, individuals and businesses have important details as well. The IRS and Security Summit partners also share YouTube videos on security steps for taxpayers. The videos can be viewed or downloaded at Easy Steps to Protect Your Computer and Phone and Security Measures Help Protect Against Tax-Related Identity Theft. Employers can share Publication 4524, Security Awareness for TaxpayersPDF, with their employees and customers and tax professionals can share with clients.

https://www.irs.gov/newsroom/reminder-to-ira-owners-age-70-and-a-half-or-over-qualified-charitable-distributions-are-great-options-for-making-tax-free-gifts-to-charity

IR-2022-201, November 17, 2022 WASHINGTON — The Internal Revenue Service today reminded IRA owners age 70½ or over of their option to transfer up to $100,000 to charity tax-free each year. These transfers, known as qualified charitable distributions or QCDs, offer eligible older Americans a great way to easily give to charity before the end of the year. Moreover, for those who are at least 72, QCDs count toward the IRA owner's required minimum distribution (RMD) for the year. How to set up a QCD Any IRA owner who wishes to make a QCD for 2022 should contact their IRA trustee soon so the trustee will have time to complete the transaction before the end of the year. Normally, distributions from a traditional individual retirement arrangement (IRA) are taxable when received. With a QCD, however, these distributions become tax-free as long as they're paid directly from the IRA to an eligible charitable organization. QCDs can be made electronically, directly to the charity, or by check payable to the charity. An IRA distribution, such as an electronic payment made directly to the IRA owner, does not count as a QCD. Likewise, a check made payable to the IRA owner is not a QCD. Each year, an IRA owner age 70½ or over can exclude from gross income up to $100,000 of these QCDs. For a married couple, if both spouses are age 70½ or over and both have IRAs, each spouse can exclude up to $100,000 for a total of up to $200,000 per year. The QCD option is available regardless of whether an eligible IRA owner itemizes deductions on Schedule A. Transferred amounts are not taxable, and no deduction is available for the transfer. Report correctly A 2022 QCD must be reported on the 2022 federal income tax return, normally filed during the 2023 tax filing season. In early 2023, the IRA owner will receive Form 1099-R from their IRA trustee that shows any IRA distributions made during calendar year 2022, including both regular distributions and QCDs. The total distribution is in Box 1 on that form. There is no special code for a QCD. Like other IRA distributions, QCDs are shown on Line 4 of Form 1040 or Form 1040-SR. If part or all of an IRA distribution is a QCD, enter the total amount of the IRA distribution on Line 4a. This is the amount shown in Box 1 on Form 1099-R. Then, if the full amount of the distribution is a QCD, enter 0 on Line 4b. If only part of it is a QCD, the remaining taxable portion is normally entered on Line 4b. Either way, be sure to enter "QCD" next to Line 4b. Further details will be in the final instructions to the 2022 Form 1040. Get a receipt QCDs are not deductible as charitable contributions on Schedule A. But, as with deductible contributions, the donor must get a written acknowledgement of their contribution from the charitable organization, before filing their return. In general, the acknowledgement must state the date and amount of the contribution and indicate whether the donor received anything of value in return. For details, see the Acknowledgement section in Publication 526, available on IRS.gov. For more information about IRA distributions and QCDs, see Publication 590-B, also available on IRS.gov.

https://www.irs.gov/newsroom/irs-advisory-council-issues-2022-annual-report

IR-2022-200, November 15, 2022 WASHINGTON — The Internal Revenue Service Advisory Council (IRSAC) today issued its annual report for 2022PDF, including recommendations to the IRS on new and continuing issues in tax administration. The 2022 Public Report includes recommendations on 21 issues covering a broad range of topics including: IRS business and information technology modernization. Reduction in electronic filing threshold for information return filers. Alignment of electronic signature requirements on withholding certificates. Accelerated issuance of IRS Form 6166, Certification of U.S. Residency. The Examination Customer Coordination and Innovation Office. Series 8038 Form Redesign and Updates. Business Master File (BMF) Transcript Delivery Service (TDS). In addition, the report "emphasizes the need for consistent and multi-year funding for the IRS to achieve its goals of providing efficient, effective, modern service to the nation's taxpayers." It also "provides targeted feedback to improve the taxpayer experience while supporting crucial enforcement efforts and navigating a rapidly changing digital environment." The IRSAC serves as a federal advisory committee to the IRS commissioner that provides an organized public forum for discussion of relevant tax administration issues between IRS officials and representatives of the public. IRSAC members offer constructive observations regarding current or proposed IRS policies, programs and procedures. The IRSAC is administered under the Federal Advisory Committee Act by the Office of National Public Liaison, part of IRS Communications and Liaison, and draws its members from the taxpaying public, the tax professional community, representatives of the low-income community, small and large businesses, tax-exempt and government entities, the payroll industry and academia. Five subgroups report to the parent council: Information Reporting Large Business & International Small Business/Self-Employed Tax Exempt/Government Entities Wage & Investment Acting Commissioner Doug O'Donnell and IRS executives thanked 10 members of the council whose terms end this year: W. Edward Afield – Afield served on the Small Business/Self Employed Subgroup. Robert Howren – Howren served on the Large Business & International Subgroup. Denise Jackson – Jackson served on the Wage & Investment Subgroup. Kathleen Lach – Lach served on the Small Business/Self Employed Subgroup. Carol Lew – Lew served as Chair of IRSAC. Kelly Myers – Myers served on the Small Business/Self Employed Subgroup. Joseph Novak – Novak served as Chair of the Large Business & International Subgroup. Robert Panoff – Panoff served as Chair of the Small Business/Self Employed Subgroup. Katie Sunderland – Sunderland served on the Large Business & International Subgroup. Kevin Valuet – Valuet served on the Information Reporting Subgroup.

https://www.irs.gov/newsroom/irs-reminds-taxpayers-irs-free-file-remains-open-until-nov-17

IR-2022-199, November 15, 2022 WASHINGTON — The Internal Revenue Service today reminded those who still need to file their 2021 tax returns that IRS Free File remains open until November 17 and can help those who qualify claim the Child Tax Credit, Recovery Rebate Credit or Earned Income Tax Credit. These and other tax benefits were expanded under last year's American Rescue Plan Act and other recent legislation. The only way to get these valuable benefits, however, is to file a 2021 tax return. Last month, the Internal Revenue Service sent letters to more than 9 million individuals and families who appeared to qualify for a variety of key tax benefits but had not yet claimed them by filing a 2021 federal income tax return. Many in this group may be eligible to claim some or all of the 2021 Recovery Rebate Credit, the Child Tax Credit, the Earned Income Tax Credit and other tax credits, depending on their personal and family situation. The letter, printed in both English and Spanish, provided a brief overview of each of these credits. Often, individuals and families can get these expanded tax benefits, even if they have little or no income from a job, business or other source. This means that many people who don't normally need to file a tax return should do so this year, even if they haven't been required to file in recent years. There's no penalty for a refund claimed on a tax return filed after the regular April 2022 tax deadline. The fastest and easiest way to get a refund is to file an accurate return electronically and choose direct deposit. To help people claim these benefits without charge, IRS Free File will remain open this year, until November 17, 2022. Available only at IRS.gov/freefile, IRS Free File lets people whose incomes are $73,000 or less to file a return online for free using brand-name software. IRS Free File is sponsored by the Free File Alliance, a partnership between the IRS and the tax software industry, a public-private partnership that provides their brand-name products for free. IRS Free File provides two ways for taxpayers to prepare and file their 2021 federal income tax return online for free: IRS Partner Sites. Traditional IRS Free File provides free online tax preparation and filing options on IRS partner sites. Individual taxpayers whose adjusted gross income (AGI) is $73,000 or less qualify for any IRS Free File partner offers. Free File lets individuals electronically prepare and file their federal income tax online using guided tax preparation. Free Fillable Forms. For taxpayers whose AGI is greater than $73,000, there's the Free File Fillable Forms option. It provides electronic federal tax forms that can be filled out and filed online for free. To use this option, taxpayers should know how to prepare their own tax return. Always start at IRS.gov: From the homepage, select File Your Taxes for Free. Use the IRS Free File Lookup Tool to narrow the list of providers or the Browse All Offers page to see a full list of providers. Follow the link to the chosen IRS Free File provider's website. Prior year returns can be filed electronically only by registered tax preparers for the two previous tax years. Otherwise, taxpayers must print, sign and mail prior year returns. The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications lists qualified local preparers.

https://www.irs.gov/newsroom/irs-five-year-strategic-plan-now-available-in-spanish

IR-2022-198, November 10, 2022 WASHINGTON — The Internal Revenue Service announced today that, for the first-time ever, the agency's Strategic Plan for Fiscal Years 2022-2026 is now available in Spanish. This announcement aligns with the IRS's continued effort to expand tax resources in more languages to provide taxpayers with the service they deserve. As part of the agency's new five-year Strategic Plan, the IRS has committed to increase the availability of services and tax products that are easy to use and support the needs of all communities. Recent multilingual efforts include the addition of a translation of the Instructions for Form 8821, Tax Information Authorization, in traditional Chinese as well as an expansion of its multilingual products, Braille, text, audio and large print products available in Spanish. The Strategic Plan will serve as a roadmap to help guide the agency's programs and operations. Developed with input from external partners as well as IRS employees, the plan focuses on four goals that will help improve customer service: Service – Provide quality and accessible services to enhance the taxpayer experience. Enforcement – Enforce the tax law fairly and efficiently to increase voluntary compliance and narrow the tax gap. People – Foster an inclusive, diverse and well-equipped workforce and strengthen relationships with our external partners. Transformation – Transform IRS operations to become more resilient, agile and responsive to improve the taxpayer experience and narrow the tax gap. The IRS also has a Languages webpage available in 20 languages to help taxpayers find basic tax information. Some of the multilingual resources include the Taxpayer Bill of Rights, e-file resources and many tax forms, instructions and publications.

https://www.irs.gov/newsroom/irs-announces-job-openings-to-hire-over-700-new-employees-across-the-country-to-help-taxpayers-in-person

IR-2022-197, November 9, 2022 WASHINGTON — In addition to the more than 4,000 people recently hired to fill critical customer service representative positions, the Internal Revenue Service is now seeking over 700 new employees to help taxpayers at Taxpayer Assistance Centers across the country. "This is an important priority to provide more service at the IRS for the upcoming filing season," said Ken Corbin, the Service's Taxpayer Experience Officer and Wage and Investment Commissioner. "We are working to have more than 270 walk-in sites properly staffed to provide the help taxpayers need and deserve. This will be the first time in a decade our walk-in sites will be fully staffed." This increase in staffing is part of much wider IRS improvements enabled by the Inflation Reduction Act funding approved in August 2022, and additional updates on the implementation of the landmark 10-year legislation will be provided soon. IRS employees not only serve the agency but are imperative for the nation's tax administration, which collects nearly 96% of the nation's revenue needed to fund nearly all federal government programs. The work we do supports the nation's most vital initiatives, from homeland security and U.S. defense to Social Security as well as programs and projects including parklands and forests, roads and bridges, libraries, museums, schools and more. For these 700 openings, the technical positions needed are Individual Taxpayer Advisory Specialists who provide face-to-face assistance in IRS TAC offices and the Initial Assistance Representatives, responsible for greeting and determining the needs of taxpayers visiting TAC offices. These important positions have highly competitive pay and benefits including on-the-job training, opportunities for advancement, health and life insurance, and a federal retirement. The IRS also offers a wealth of workplace flexibilities to help employees balance career and home with 11 paid holidays, 13 vacation days and sick leave. Other work/life balance programs include flexible work schedules, the Child Care Subsidy Program, the Employee Assistance Program, health services and paid maternity/paternity leave. In addition to the face-to-face representatives and phone assistors, the IRS is also working to hire additional people throughout the agency, not just in taxpayer service areas but in Information Technology and compliance positions – all with a goal of improving the work the IRS does. The IRS is an equal opportunity employer and hires talented and dedicated individuals from many backgrounds. IRS encourages those who are looking for a new opportunity or who are just starting work-life to consider an IRS career. All employees must be U.S. citizens and pass an FBI fingerprint check and tax compliance verification. Federal experience is not required. The applicant may have gained experience in the public sector, private sector or volunteer service. Prospective employees are encouraged to attend an upcoming IRS Careers information session to learn more about the position and requirements, how to apply, and all the benefits of federal service. Register for the hiring information session on November 17 at 1 p.m. Eastern time. To learn more about these positions, visit USAJOBS. To learn about other open positions at the IRS, go to the IRS Careers page. Also, follow the IRS on LinkedIn and on Twitter @RecruitmentIRS. More Information: IRS job events Find an IRS job IRS local offices

https://www.irs.gov/newsroom/treasury-and-irs-expand-program-for-approving-certain-retirement-plans

IR-2022-196, November 7, 2022 WASHINGTON — The Treasury Department and Internal Revenue Service today announced the expansion of one of their programs for approving retirement plans. The IRS will now allow 403(b) retirement plans, which are used by certain public schools, churches and charities, to use the same individually designed retirement plan determination letter program currently used by qualified retirement plans. Revenue Procedure 2022-40PDF details this expansion and includes other changes affecting individually designed retirement plans. Highlights of these changes: Revenue Procedure 2022-40 contains the following notable additions for 403(b) retirement plans: Expansion for initial plan determination – Beginning June 1, 2023, 403(b) retirement plan sponsors may submit determination letter applications for all initial individually designed retirement plans based on the sponsor's Employer Identification Numbers. (For further details, see section 12 of Revenue Procedure 2022-40PDF.) Terminations – Beginning June 1, 2023, 403(b) retirement plan sponsors may also request a determination letter upon plan termination on a Form 5310, Application for Determination for Terminating Plan, or at any time thereafter without regard to their EIN. Notable changes to procedures for submitting and processing individually designed retirement plans include: Prior letter issued to a Pre-approved Plan adopter not treated as an initial plan determination – A determination letter issued to an adopter of a pre-approved retirement plan as a result of filing a Form 5307, Application for Determination for Adopters of Modified Volume Submitter Plans, is no longer considered in determining whether a plan sponsor is eligible to submit that plan for a determination letter for an initial plan determination on a Form 5300, Application for Determination for Employee Benefit Plan. Scope of review – IRS generally will consider in its review qualification requirements and section 403(b) requirements that are in effect, or that have been included on a Required Amendments List, on or before the last day of the second calendar year preceding the year in which the determination letter application is submitted, subject to any specified modifications on the annual Employee Plans revenue procedure that provides the administrative and procedural rules for submitting determination letter applications, currently Revenue Procedure 2022-4. These rules will apply to submissions of all individually designed retirement plans. Revenue Procedure 2023-4, currently in development, will be released in the near future and will contain additional changes to procedural requirements for plan submissions, such as phasing-in mandatory e-submission of determination letter requests. Forms 5300 and 5310 will also be updated to reflect these changes.

https://www.irs.gov/newsroom/irs-independent-office-of-appeals-priorities-for-2023-focus-on-taxpayer-service

IR-2022-195, November 4, 2022 WASHINGTON — Today, the IRS Independent Office of Appeals released its focus guidePDF for fiscal year 2023. Appeals is taking important steps to expand communications with external stakeholders and to improve taxpayer access to Appeals. Promoting transparency and taxpayer access helps Appeals fulfill its mission to resolve tax disputes in a fair and impartial manner without the need for litigation. The focus guide outlines the taxpayer service initiatives you can expect over the coming year, including: Increasing stakeholder outreach – including to historically marginalized and limited English proficient communities—about the appeals process. Improving access to in-person and video conferences and revising letters and notices to ensure taxpayers understand that it is generally their choice how to meet with Appeals. Leveraging technology to improve how Appeals works and manages its cases. Continuing the Practitioner Perspectives series in which tax practitioners share insights and feedback with Appeals employees. Recordings of prior panel discussions on Collection Appeals and Examination Appeals are available. Developing training for Appeals employees on enhancing customer engagement. "We are excited to share Appeals' 2023 priorities," said Andy Keyso, Chief of Appeals. "We will keep doing all we can to promote a positive experience for taxpayers and practitioners, while building upon our past accomplishments and applying lessons we learned from the challenges posed by COVID-19." A key success in 2022 is how Appeals addressed a significant increase in cases referred for settlement after the taxpayer filed a petition in the United States Tax Court. Many of these cases involved taxpayers without legal representation and resulted from communications challenges and difficulties in obtaining and sharing documents during the pandemic. To avoid further delays, Appeals prioritized these docketed cases and dedicated additional resources to promptly resolve them. Appeals shared guidelinesPDF for how employees would streamline their approach to these cases with the public in April 2022. Under these guidelines, Appeals attempted to reach affected taxpayers by telephone shortly after receiving the cases. In addition, Appeals considered specific-dollar settlements, expedited tax computation, and streamlined internal documentation of proposed settlements. As always, Appeals Officers applied their professional judgment, including to accept oral testimony where appropriate, to settle the cases efficiently. Using this approach, Appeals resolved all 7,500 docketed cases pending when the initiative began. To achieve permanent improvements to the taxpayer experience, the IRS is working to increase the number of cases resolved at the earliest stage possible—before a dispute arises. "Ensuring that taxpayers and practitioners are satisfied with the appeals process is an ongoing goal for us," said Shahid Babar, Acting Deputy Chief of Appeals. "The 2023 focus guide is a way to share with the public and with employees our ideas for continually improving how Appeals resolves tax disputes."

https://www.irs.gov/newsroom/irs-ci-releases-fy2022-annual-report-highlighting-more-than-2550-investigations-90-conviction-rate-enforcement-actions-focused-on-tax-fraud-money-laundering-cybercrimes

IR-2022-194, November 3, 2022 WASHINGTON — In fiscal year 2022, IRS Criminal Investigation initiated more than 2,550 criminal investigations, identified over $31 billion from tax and financial crimes, and obtained a 90.6% conviction rate on cases accepted for prosecution. The IRS-CI FY22 Annual ReportPDF, released Thursday, details these statistics, as well as important partnerships and significant criminal enforcement actions from the past fiscal year, which began October 1, 2021, and ended September 30, 2022. "The cases the IRS-CI team investigated over the past fiscal year touch multiple continents and require cooperation with partners around the globe. This is why IRS-CI continues to cement itself as the preeminent law enforcement agency investigating financial crimes on a global scale," said IRS Commissioner Chuck Rettig. In FY22, IRS-CI expanded partnerships with foreign counterparts to help combat tax and financial crimes on a global level. IRS-CI special agents delivered trainings in countries like Argentina, Germany, Colombia, and Palau on topics ranging from cybercrime to human trafficking. IRS-CI Mexico City, after changes to Mexico law that enabled the extradition of tax fugitives, launched an initiative to identify fugitives who had absconded to Mexico and nearby countries. This initiative resulted in the location of 79 criminal fugitives and the apprehension of eight during the first year. IRS-CI joined Taskforce Kleptocapture in March 2022 to target Russian oligarchs and other sanctions-evaders. It also worked with the Chiefs of Global Tax Enforcement (J5) to identify potential sanction evaders or sanctioned assets as part of a global strategy to deter Russia's aggression. As of September 2022, the agency had identified nearly 50 individuals and entities for potential sanctions-related enforcement. IRS-CI's 2,077 special agents spent about 70% of their time investigating tax-related crimes like tax evasion and tax fraud during FY22, while nearly 30% of their time was spent on money laundering and drug trafficking cases. Special agents identified over $31 billion from tax and financial crimes, and the agency seized assets valued at approximately $7 billion in FY22. IRS-CI is the only U.S. federal law enforcement agency that focuses 100% on financial investigations. "Our team follows the money," said IRS-CI Chief Jim Lee. "We've been doing it for more than 100 years, and we've followed criminals into the dark web and now into the metaverse. Tax and other financial crimes know no borders. If you violate the law and end up in the crosshairs of an IRS-CI special agent, you are likely going to jail." Case examples include: The IRS-CI Cyber Crime Unit, with assistance from U.S. authorities, traced billions of dollars of Bitcoin stolen from Bitfinex, a cryptocurrency exchange, after a 2016 hack. This led to the February 2022 arrest of Ilya Lichtenstein and his wife, Heather Morgan, for alleged conspiracy to launder stolen cryptocurrency. IRS-CI special agents lawfully seized and recovered more than 94,000 stolen Bitcoin, which was valued at over $3.6 billion at the time, marking the largest seizure in U.S. history. The Tampa Field Office investigated Michael Dexter Little for tax-related crimes. He was sentenced to 19 years and six months in federal prison in January 2022 for conspiracy to commit wire fraud, conspiracy to commit money laundering and aggravated identity theft. Little also had to forfeit at least $12.3 million, traceable to his offenses. He filed a series of false tax returns, claiming massive, bogus fuel tax credits. He filed the false returns in his own name and the names of co-conspirators, as well as identity theft victims. He obtained at least $12.3 million in fraudulent tax refunds and attempted to obtain at least $27 million more. Little and his co-conspirators used scheme proceeds to purchase real estate and other assets for themselves. The Oakland Field Office investigated Jeff and Paulette Carpoff for running a billion-dollar fraud scheme centered around DC Solar. Investors were duped into investing in DC Solar based on fake financial and engineering reports, and the money was used to fund the Carpoffs' lavish lifestyle, which included a NASCAR sponsorship, ownership of a minor league baseball team, luxury real estate and more. The federal government seized and auctioned off 148 of the Carpoffs' vehicles to recoup more than $8 million for scheme victims. In November 2021, Jeff Carpoff was sentenced to 30 years in prison, and in June, Paulette Carpoff was sentenced to 11 years in prison. The report also includes additional case examples for each U.S. field office, an overview of IRS-CI's international footprint, details about the specialized services provided by IRS-CI and investigative statistics, broken down by discipline, for FY22. IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, boasting a near 90% federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad. More Information: IRS Criminal Investigation: By the Numbers — 2022 Annual Report video

https://www.irs.gov/newsroom/irs-seeks-comments-on-upcoming-energy-guidance

IR-2022-193, November 3, 2022 WASHINGTON — The Internal Revenue Service today issued three notices asking for comments on different aspects of extensions and enhancements of energy tax benefits in the Inflation Reduction Act. The IRS anticipates that constructive comments from interested parties will aid the agency in drafting the guidance items most reflective of the needs of taxpayers entitled to claim energy credits. Notice 2022-56PDF requests comments related to the qualified commercial clean vehicles provisions and the alternative fuel vehicle refueling property.   Notice 2022-57PDF requests comments related to the credit for carbon capture.   Notice 2022-58PDF requests comments related to the credit for the production of clean hydrogen and the clean fuel production credit.  The IRS is requesting that those interested in providing feedback to the questions in the notices follow the instructions in the notices to reply by December 3, 2022. The latest information on energy guidance and other issues related to the Inflation Reduction Act is available on a special page on IRS.gov.

https://www.irs.gov/newsroom/treasury-irs-provide-updated-guidance-on-accounting-methods-for-specified-research-or-experimental-expenditures

IR-2022-235, December 29, 2022 WASHINGTON — The Treasury Department and Internal Revenue Service today issued Revenue Procedure 2023-11PDF providing updated guidelines for accounting method changes for specified research or experimental expenditures. The new guidance, posted today on IRS.gov, modifies and supersedes Revenue Procedure 2023-8PDF, issued earlier this month. Revenue Procedure 2023-11 is designed to encourage timely compliance with changes made by the Tax Cuts and Jobs Act, enacted in 2017. In general, the TCJA changes apply for specified research or experimental expenditures paid or incurred in taxable years beginning after December 31, 2021.

https://www.irs.gov/newsroom/irs-issues-standard-mileage-rates-for-2023-business-use-increases-3-cents-per-mile

IR-2022-234, December 29, 2022 WASHINGTON — The Internal Revenue Service today issued the 2023 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning on January 1, 2023, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: 65.5 cents per mile driven for business use, up 3 cents from the midyear increase setting the rate for the second half of 2022. 22 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, consistent with the increased midyear rate set for the second half of 2022. 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2022. These rates apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles. The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs. It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, unless they are members of the Armed Forces on active duty moving under orders to a permanent change of station. For more details see Moving Expenses for Members of the Armed Forces. Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. Taxpayers can use the standard mileage rate but generally must opt to use it in the first year the car is available for business use. Then, in later years, they can choose either the standard mileage rate or actual expenses. Leased vehicles must use the standard mileage rate method for the entire lease period (including renewals) if the standard mileage rate is chosen. Notice 2023-03PDF contains the optional 2023 standard mileage rates, as well as the maximum automobile cost used to calculate the allowance under a fixed and variable rate (FAVR) plan. In addition, the notice provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in calendar year 2023 for which employers may use the fleet-average valuation rule in or the vehicle cents-per-mile valuation rule.

https://www.irs.gov/newsroom/treasury-irs-issue-guidance-on-the-incremental-cost-for-the-commercial-clean-vehicle-credit

IR-2022-233, December 29, 2022 WASHINGTON — The Treasury Department and Internal Revenue Service today issued Notice 2023-9PDF regarding the commercial clean vehicle credit for commercial vehicles purchased and placed in service, during the taxable year. The guidance informs taxpayers that the Department of the Treasury and the Internal Revenue Service have reviewed the incremental cost for all street vehicles in calendar year 2023. The analysis shows that the incremental cost of all street vehicles (other than in the case of compact car PHEVs) that have a gross vehicle weight rating of less than 14,000 pounds will be greater than $7,500 in calendar year 2023. Accordingly, the incremental cost will not limit the available credit amount for street vehicles that have a gross vehicle weight rating of less than 14,000 pounds and are placed in service in calendar year 2023. For compact car plug-in electric hybrids for which the incremental cost was calculated to be less than $7,500, the Treasury Department and the IRS will accept for vehicles placed in service during calendar year 2023 a taxpayer's use, in calculating the credit amount, of the incremental cost published by the Department of Energy.

https://www.irs.gov/newsroom/treasury-irs-issue-guidance-on-their-intent-to-publish-regulations-regarding-clean-vehicles

IR-2022-232, December 29, 2022 WASHINGTON — The Treasury Department and Internal Revenue Service today issued Notice 2023-01PDF of its intent to publish regulations related to the new clean vehicle credit. The Inflation Reduction Act of 2022 (IRA) provided a credit for qualified clean vehicles that are acquired and placed in service by the taxpayer during the taxable year. The IRA added certain requirements that any vehicle eligible for the new clean vehicle credit undergo final assembly in North America, and that no credit will be allowed for a vehicle with a manufacturer's suggested retail price more than an applicable limitation, depending on vehicle classification. The guidance issued today informs taxpayers that the Department of the Treasury and the Internal Revenue Service intend to propose regulations addressing the definitions of certain terms in respect of the credit and lays out the expected content of those regulations. The notice provides that the proposed regulations will include definitions of the following terms, which are relevant for new clean vehicles placed in service after December 31, 2022: Final Assembly; North America; Manufacturer's suggested retail price; Classifications for categories of vehicles, including vans, sport utility vehicles, pickup trucks, and other vehicles; and Placed in service. 

https://www.irs.gov/newsroom/irs-releases-frequently-asked-questions-about-clean-vehicles-credits-for-new-previously-owned-and-commercial-clean-vehicles

IR-2022-231, December 29, 2022 WASHINGTON — The Internal Revenue Service today released frequently asked questions (FAQs) about clean vehicle credits for new, previously owned and commercial clean vehicles in Fact Sheet (FS-2022-42)PDF. The Inflation Reduction Act of 2022 (IRA) makes several changes to the new clean vehicle credit for qualified plug-in electric drive motor vehicles, including adding fuel cell vehicles. The IRA also added a new credit for previously owned and commercial clean vehicles. These FAQs provide detail on how the IRA revises the new clean vehicle credit for individuals and businesses, and information on the previously owned clean vehicle credit for individuals, and the new credit for qualified commercial clean vehicles. More information about reliance is available. IRS-FAQ

https://www.irs.gov/newsroom/irs-updates-frequently-asked-questions-about-form-1099-k

IR-2022-230, December 28, 2022 WASHINGTON — The Internal Revenue Service today updated frequently asked questions (FAQs) for Form 1099-K, Payment Card and Third Party Network Transactions, in Fact Sheet FS-2022-41PDF. The updates include: Definitions General information Individuals More information about reliance is available. IRS-FAQ

https://www.irs.gov/newsroom/treasury-irs-issue-interim-guidance-on-new-corporate-alternative-minimum-tax

IR-2022-229, December 27, 2022 WASHINGTON — The Treasury Department and the Internal Revenue Service today issued Notice 2023-07PDF, which provides interim guidance regarding the application of the new corporate alternative minimum tax (CAMT) until the issuance of proposed regulations. The Inflation Reduction Act created the CAMT, which imposes a 15% minimum tax on the adjusted financial statement income of large corporations for taxable years beginning after December 31, 2022. The CAMT generally applies to large corporations with average annual financial statement income exceeding $1 billion. The Treasury Department and the IRS have issued Notice 2023-7 to provide certainty to taxpayers in advance of the CAMT effective date. In particular, Notice 2023-7 clarifies which corporations the CAMT applies to and how the alternative minimum tax is calculated. It also provides taxpayers with answers to basic questions about how certain transactions may be treated and certain adjustments that may be taken into account for purposes of the alternative minimum tax, including adjustments for depreciation and certain tax credits. Critically, it also gives smaller corporations an easy method for determining that the new alternative minimum tax does not apply to them. Notice 2023-7 also solicits comments on the rules contained in the notice and certain other issues under consideration. The Treasury Department and the IRS recommend that such comments be submitted within 60 days after the date on which Notice 2023-7 is published in the Internal Revenue Bulletin.

https://www.irs.gov/newsroom/treasury-irs-issue-guidance-on-corporate-stock-repurchase-excise-tax-in-advance-of-forthcoming-regulations

IR-2022-228, December 27, 2022 WASHINGTON — The Treasury Department and the Internal Revenue Service today issued Notice 2023-2PDF, which provides interim guidance regarding the application of the corporate stock repurchase excise tax until the issuance of proposed regulations. The new code section added by the Inflation Reduction Act imposes a 1% excise tax on the aggregate fair market value of stock repurchased by certain corporations during the taxable year, subject to adjustments. The Treasury Department and the IRS have issued Notice 2023-2 to provide certainty to taxpayers in advance of January 1, 2023, the date on which the new excise tax will apply to stock repurchases. Notice 2023-2 describes certain rules and procedures that the Treasury Department and the IRS intend to include in the forthcoming proposed regulations. Taxpayers may rely upon Notice 2023-2 until the issuance of the forthcoming proposed regulations. Notice 2023-2 also solicits comments on the rules contained in the notice and certain other issues under consideration. The Treasury Department and the IRS recommend that such comments be submitted within 60 days of the date on which the notice is published in the Internal Revenue Bulletin.

https://www.irs.gov/newsroom/treasury-irs-provide-transitional-guidance-for-broker-reporting-on-digital-assets

IR-2022-227, December 23, 2022 WASHINGTON — The Treasury Department and Internal Revenue Service announced today that brokers are not required to report additional information with respect to dispositions of digital assets until final regulations are issued under sections 6045 and 6045A. The Infrastructure Investment and Jobs Act (Infrastructure Act), enacted in 2021, amended provisions in sections 6045 and 6045A to clarify and expand the rules regarding the reporting of information on digital assets by brokers. Brokers are still required to comply with existing laws and regulations. Further details are in Announcement 2023-02PDF, posted today on IRS.gov. This transitional guidance applies only to information returns filed or furnished by brokers. In contrast, taxpayers are still required to report any income they receive from transactions involving digital assets. They are also required to answer the digital asset question on page 1 of either Form 1040PDF or Form 1040-SRPDF See the instructions to these forms for details. For more information, including a set of frequently-asked questions, visit the Digital Assets page on IRS.gov.

https://www.irs.gov/newsroom/irs-announces-delay-for-implementation-of-600-reporting-threshold-for-third-party-payment-platforms-forms-1099-k

Updated January 3, 2023: Frequently asked questions about Form 1099-KPDF IR-2022-226, December 23, 2022 WASHINGTON — The Internal Revenue Service today announced a delay in reporting thresholds for third-party settlement organizations set to take effect for the upcoming tax filing season. As a result of this delay, third-party settlement organizations will not be required to report tax year 2022 transactions on a Form 1099-K to the IRS or the payee for the lower, $600 threshold amount enacted as part of the American Rescue Plan of 2021. As part of this, the IRS released guidance today outlining that calendar year 2022 will be a transition period for implementation of the lowered threshold reporting for third-party settlement organizations (TPSOs) that would have generated Form 1099-Ks for taxpayers. "The IRS and Treasury heard a number of concerns regarding the timeline of implementation of these changes under the American Rescue Plan," said Acting IRS Commissioner Doug O'Donnell. "To help smooth the transition and ensure clarity for taxpayers, tax professionals and industry, the IRS will delay implementation of the 1099-K changes. The additional time will help reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements." The American Rescue Plan of 2021 changed the reporting threshold for TPSOs. The new threshold for business transactions is $600 per year; changed from the previous threshold of more than 200 transactions per year, exceeding an aggregate amount of $20,000. The law is not intended to track personal transactions such as sharing the cost of a car ride or meal, birthday or holiday gifts, or paying a family member or another for a household bill. Under the law, beginning January 1, 2023, a TPSO is required to report third-party network transactions paid in 2022 with any participating payee that exceed a minimum threshold of $600 in aggregate payments, regardless of the number of transactions. TPSOs report these transactions by providing individual payee's an IRS Form 1099-K, Payment Card and Third-Party Network Transactions. The transition period described in Notice 2023-10PDF, delays the reporting of transactions in excess of $600 to transactions that occur after calendar year 2022. The transition period is intended to facilitate an orderly transition for TPSO tax compliance, as well as individual payee compliance with income tax reporting. A participating payee, in the case of a third-party network transaction, is any person who accepts payment from a third-party settlement organization for a business transaction. The change under the law is hugely important because tax compliance is higher when amounts are subject to information reporting, like the Form 1099-K. However, the IRS noted it must be managed carefully to help ensure that 1099-Ks are only issued to taxpayers who should receive them. In addition, it's important that taxpayers understand what to do as a result of this reporting, and tax preparers and software providers have the information they need to assist taxpayers. Additional details on the delay will be available in the near future along with additional information to help taxpayers and the industry. For taxpayers who may have already received a 1099-K as a result of the statutory changes, the IRS is working rapidly to provide instructions and clarity so that taxpayers understand what to do. The IRS also noted that the existing 1099-K reporting threshold of $20,000 in payments from over 200 transactions will remain in effect.

https://www.irs.gov/newsroom/irs-releases-frequently-asked-questions-about-energy-efficient-home-improvements-and-residential-clean-energy-property-credits

IR-2022-225, December 22, 2022 WASHINGTON — The Internal Revenue Service today released frequently asked questions (FAQs) about energy efficient home improvements and residential clean energy property credits in Fact Sheet FS-2022-40PDF. The inflation Reduction Act of 2022 (IRA) amended the credits for energy efficient home improvements and residential energy property. These FAQs provide details on the IRA's changes to these tax credits, information on eligible expenditures, and provides examples of how the credit limitations work. More information about reliance is available. IRS-FAQ

https://www.irs.gov/newsroom/save-for-retirement-now-get-a-tax-credit-later-savers-credit-higher-limits-can-help-low-and-moderate-income-workers-save-more-in-2023

IR-2022-224, December 21, 2022 WASHINGTON — The Internal Revenue Service reminds low- and moderate-income workers that they can save for retirement now and possibly earn a special tax credit in 2022 and years ahead. The Retirement Savings Contributions Credit, also known as the Saver's Credit, helps offset part of the first $2,000 workers voluntarily contribute to Individual Retirement Arrangements, 401(k) plans and similar workplace retirement programs. The credit also helps any eligible person with a disability who is the designated beneficiary of an Achieving a Better Life Experience (ABLE) account, contribute to that account. For more information about ABLE accounts, see Publication 907, available on IRS.gov. The Saver's Credit is available in addition to any other tax savings that apply. Still time to take action Eligible workers still have time to make qualifying retirement contributions and get the Saver's Credit on their 2022 tax return. People have until April 18, 2023 - the due date for filing their 2022 return - to set up a new IRA or add money to an existing IRA for 2022. Both Roth and traditional IRAs qualify. On the other hand, those participating in workplace retirement plans must take action by the end of 2022 for contributions to count for this year. This means elective deferrals (contributions) must be made by December 31 to a: 401(k) plan. 403(b) plan for employees of public schools and certain tax-exempt organizations. Governmental 457 plan for state or local government employees. Thrift Savings Plan (TSP) for federal employees. Contributions to certain other workplace retirement plans also qualify. See the instructions to Form 8880 for details. Employees unable to set aside money this year may want to schedule their 2023 contributions soon so their employer can begin withholding them in January. Who qualifies Income limits, based on a taxpayer's adjusted gross income and marital or filing status, apply to the Saver's Credit. But due to inflation, the limits will increase markedly in 2023. As a result, the Saver's Credit can be claimed by: Married couples filing jointly with incomes up to $68,000 in 2022 or $73,000 in 2023. Heads of household with incomes up to $51,000 in 2022 or $54,750 in 2023. Married individuals filing separately and singles with incomes up to $34,000 in 2022 or $36,500 in 2023. Like other tax credits, the Saver's Credit can increase a taxpayer's refund or reduce the tax owed. Though the maximum Saver's Credit is $1,000 ($2,000 for married couples), the IRS cautioned that it is often much less and, due in part to the impact of other deductions and credits, may, in fact, be zero for some taxpayers. A taxpayer's credit amount is based on their filing status, adjusted gross income, tax liability and amount contributed to qualifying retirement programs or ABLE accounts. Form 8880 is used to claim the Saver's Credit, and its instructions have details on figuring the credit correctly. In tax year 2020, the most recent year for which complete figures are available, Saver's Credits totaling more than $1.7 billion were claimed on about 9.4 million individual income tax returns. That's an average of about $186 per eligible return. The Saver's Credit supplements other tax benefits available to people who set money aside for retirement. For example, most workers may deduct their contributions to a traditional IRA. Though Roth IRA contributions are not deductible, qualifying withdrawals, usually after retirement, are tax-free. Normally, contributions to 401(k) and similar workplace plans are not taxed until withdrawn. Some restrictions apply Other special rules that apply to the Saver's Credit include: Eligible taxpayers must be at least 18 years of age. Anyone claimed as a dependent on someone else's return cannot take the credit. A student cannot take the credit. A person enrolled as a full-time student during any part of 5 calendar months during the year is considered a student. Any distributions from a retirement plan or ABLE account reduce the contribution amount used to figure the credit. For 2022, this rule applies to distributions received after 2019 and before the due date, including extensions, of the 2022 return. Form 8880 and its instructions have details on making this computation. To learn more about other ways to get ready for the tax season ahead, visit IRS.gov/getready.

https://www.irs.gov/newsroom/treasury-irs-issue-guidance-on-new-sustainable-aviation-fuel-credit

IR-2022-223, December 19, 2022 WASHINGTON — The Treasury Department and Internal Revenue Service today issued a notice regarding the Sustainable Aviation Fuel (SAF) credit. This is a new credit created by the Inflation Reduction Act of 2022. It applies to a qualified fuel mixture containing sustainable aviation fuel for certain sales or uses in calendar years 2023 and 2024. Notice 2023-06PDF explains the requirements for the fuel to be eligible for the SAF credit, the various methods in which a claimant may claim the credit, and which parties must be registered for the different activities in the process. The notice also asks for public comments on various aspects of the statute, which will help Treasury and IRS in developing additional guidance. The SAF credit is $1.25 for each gallon of sustainable aviation fuel in a qualified mixture. To qualify for the credit, the sustainable aviation fuel must have a minimum reduction of 50% in lifecycle greenhouse gas emissions. Additionally, there is a supplemental credit of one cent for each percent that the reduction exceeds 50%. The notice provides a safe harbor for calculating the lifecycle greenhouse gas emissions reduction percentage. Finally, the notice explains that a claimant may choose how to claim the Sustainable Aviation Fuel Credit. The first is through the excise tax system. The second is a general business credit that is nonrefundable and must be included in income. Notice 2023-06 also clarifies what constitutes sustainable aviation fuel and a qualified mixture. 

https://www.irs.gov/newsroom/irs-announces-new-deputy-chief-for-the-taxpayer-experience-office

IR-2022-222, December 16, 2022 WASHINGTON — The Internal Revenue Service announced Courtney Kay-Decker as the new Deputy Chief Taxpayer Experience Officer today. Under the leadership of Chief Taxpayer Experience Officer Ken Corbin, Kay-Decker will lead IRS efforts to improve the taxpayer experience including driving the strategy for taxpayer interactions, monitoring and prioritizing the taxpayer experience, coordinating identification of taxpayer trends and best practices, and collaborating on the implementation of Service-wide taxpayer experience improvements. "Courtney brings a wealth of experience in tax and proven skill managing programs designed to improve the taxpayer experience," said Ken Corbin, Chief Taxpayer Experience Officer. "Her career has ranged from practitioner to state tax administrator, volunteer tax preparer to tax law teacher. Each of these roles has helped her build deep knowledge of stakeholders in the tax ecosystem and will help her spearhead efforts to identify new strategies to improve taxpayer interactions." Prior to her selection, Kay-Decker served as an attorney at Lane & Waterman LLP in Davenport, Iowa, where her areas of practice included tax and administrative matters. From 2011 to 2019, she served as Director of the Iowa Department of Revenue. As director, Kay-Decker focused on improving administrative rules, guidance, and processes to simplify and reduce compliance burdens for the taxpayers of Iowa. She also served on the Board of Trustees of the Federation of Tax Administrators. Additionally, Kay-Decker served as the first state co-chair of the Identity Theft and Tax Refund Fraud Information Sharing Analysis Center, a collaboration among the IRS, state tax agencies and industry partners who work to develop tools and protocols to detect and prevent identity theft tax refund fraud. She's served as a Volunteer Income Tax Assistance site coordinator and as a member of the Electronic Tax Administration Advisory Committee. Kay-Decker received her B.A. in Economics from Northwestern University in Evanston, Illinois, and holds a J.D. with distinction from the University of Iowa College of Law where she also serves as an adjunct lecturer. The Taxpayer Experience Office, formally established earlier this year, leads the effort to improve customer service at the IRS by focusing on six key strategies identified in the President's Executive Order on Transforming Federal Customer Experience and Service Delivery to Rebuild Trust in Government, and the Taxpayer First Act Report to CongressPDF.

https://www.irs.gov/newsroom/irs-presents-its-fiscal-year-2022-agency-financial-report

IR-2022-221, December 15, 2022 WASHINGTON — The Internal Revenue Service published its most recent Financial ReportPDF on the IRS.gov website, which provides a glimpse at IRS operations during the recently completed fiscal year 2022. This update highlights the agency's fiscal actions and financial management activities. During fiscal year 2022, the IRS received more than $4.9 trillion in tax revenue and distributed $642 billion in federal tax refunds and other outlays. "I am proud that the stewardship of our operations is a clear demonstration of the commitment we share toward our mission of leading the IRS's financial management with integrity and accountability through expert planning and sound financial advice to help serve taxpayers and tax administration," said Teresa Hunter, IRS Chief Financial Officer.

https://www.irs.gov/newsroom/irs-reminder-for-many-employers-and-self-employed-people-deferred-social-security-tax-payment-due-dec-31

IR-2022-220, December 14, 2022 WASHINGTON — The Internal Revenue Service today reminded employers and self-employed individuals that chose to defer paying part of their 2020 Social Security tax liability that their second annual installment of the deferred amount is due on December 31, 2022. As part of the COVID relief provided during 2020, employers could choose to put off paying the employer's share of their Social Security tax liability, which is 6.2% of wages. Self-employed individuals could also choose to defer a similar amount of their self-employment tax. Generally, half of that deferral was due on December 31, 2021. The other half is due on December 31, 2022. Earlier this fall, the IRS sent reminder notices to affected employers and self-employed individuals. The agency noted, however, that those affected are still required to make the payment on time, even if they did not receive a notice. How to repay the deferred taxes Employers and individuals have several options for making this payment. Deferral payments can made through the Electronic Federal Tax Payment System (EFTPS),  Direct Pay , by debit card, credit card or digital wallet, or with a check or money order. No matter which payment option is chosen, it must be made separately from other tax payments and deposits. This will ensure that it is credited properly and will help avoid follow-up bills or notices. EFTPS Employers and individuals can make the deferral payments through enrollment in the Electronic Federal Tax Payment System, a free service available from the Treasury Department. On the Tax Type Selection screen, choose Deferred Social Security Tax and then change the date to the applicable tax period (the calendar quarter in 2020 for which tax was deferred). Visit EFTPS.gov or call 800-555-4477 or 800-733-4829 for details. Direct Pay Alternatively, self-employed individual taxpayers can choose Direct Pay to pay directly from a checking or savings account. This service is available free only on Direct Pay With Bank Account. Select the "Balance Due" reason for payment and apply the payment to the 2020 tax year where the payment was deferred. Direct Pay is not available to pay employment taxes. Debit card, credit card or digital wallet If paying with a credit card, debit card or digital wallet, select "installment agreement." Apply the payment to the 2020 tax year where the payment was deferred. Note that the IRS does not charge a fee for this service, but the authorized third-party payment processors do. Visit IRS.gov/payments for details. Check or money order Make any check or money order payable to United States Treasury, not IRS. For more information on where to mail payments see Instructions for Form 941.

https://www.irs.gov/newsroom/irs-independent-office-of-appeals-selects-new-deputy-chief

IR-2022-219, December 14, 2022 WASHINGTON — The IRS Independent Office of Appeals has selected Elizabeth (Liz) Askey as its new deputy chief. In this role, she will provide leadership and direction over nationwide programs designed to fairly and impartially resolve tax controversies without litigation on behalf of the federal government and taxpayers. Chief of Appeals Andy Keyso noted he wanted to bring in a leader with significant experience in the practitioner community. "Liz brings a wealth of relevant experience to this critical position from her years of private practice and her time in government," Keyso said. "Her diverse perspective will complement our continued focus on improving the taxpayer experience." Askey spent nearly 30 years as a tax controversy and policy practitioner at several law and accounting firms and in private industry, where her focus was resolving administrative controversies in examinations and at the Independent Office of Appeals. She joined the IRS Office of Chief Counsel in 2019 as deputy division counsel (international) for the Large Business & International Division, where she worked with the division counsel to manage LB&I attorneys and paralegals responsible for litigating LB&I cases and providing advice to exam teams and the Independent Office of Appeals. She also provided advisory services on all international program matters within LB&I's jurisdiction. Earlier in her career she also served as associate tax legislative counsel in the Office of Tax Policy at the U.S. Department of the Treasury. Askey received her Bachelor of Arts magna cum laude from Bryn Mawr College and her Juris Doctor cum laude from Harvard Law School.

https://www.irs.gov/newsroom/treasury-and-irs-set-out-procedures-for-manufacturers-sellers-of-clean-vehicles

IR-2022-218, December 12, 2022 WASHINGTON — The Treasury Department and Internal Revenue Service today issued a Revenue Procedure setting out key processes for manufacturers and sellers of clean vehicles. These processes are required for vehicles to be eligible for one or more clean vehicle tax incentives, including tax credits for new and previously owned clean vehicles, as well as for commercial clean vehicles. For vehicle manufacturers, Revenue Procedure 2022-42PDF provides guidance on new rules in the tax law added by the Inflation Reduction Act on how to enter into a written agreement with the IRS and how to provide periodic written reports containing specified information related to each clean vehicle manufactured. This revenue procedure also provides the procedures for persons selling vehicles to report specified information to the IRS for a vehicle to be eligible for the credit for new or previously owned clean vehicles.

https://www.irs.gov/newsroom/irs-reminds-those-over-age-72-to-start-withdrawals-from-iras-and-retirement-plans-to-avoid-penalties

IR-2022-217, December 12, 2022 WASHINGTON — The Internal Revenue Service today reminded those who were born in 1950 or earlier that funds in their retirement plans and individual retirement arrangements face important upcoming deadlines for required minimum distributions to avoid penalties. Required minimum distributions, or RMDs, are minimum amounts that many retirement plan and IRA account owners must generally withdraw annually after they reach age 72. Account owners can delay taking their first RMD until April 1 following the later of the calendar year they reach age 72 or, in a workplace retirement plan, retire. RMDs are taxable income and may be subject to penalities if not timely taken. IRAs: The RMD rules require traditional IRA, and SEP, SARSEP, and SIMPLE IRA account holders to begin taking distributions at age 72, even if they're still working. Account holders reaching age 72 in 2022 must take their first RMD by April 1, 2023, and the second RMD by December 31, 2023, and each year thereafter. Retirement Plans: In 401(k), 403(b) and 457(b) plans; profit-sharing and other defined contribution plans; and defined benefit plans, the first RMD is due by April 1 of the later of the year they reach age 72, or the participant is no longer employed (if allowed by the plan). A 5% owner of the employer must begin taking RMDs at age 72. RMDs may not be rolled over to another IRA or retirement plan. See the RMD Comparison Chart that highlights some of the basic RMD rules that apply to IRAs and defined contribution plans. Roth IRAs do not require distributions while the original owner is alive. RMD Calculations and 50% tax on missed distributions An IRA trustee, or plan administrator, must either report the amount of the RMD to the IRA owner or offer to calculate it. An IRA owner, or trustee, must calculate the RMD separately for each IRA owned. They may be able to withdraw the total amount from one or more of the IRAs. However, RMDs from workplace retirement plans must be taken separately from each plan. Not taking a required distribution, or not withdrawing enough, could mean a 50% excise tax on the amount not distributed. The IRS has worksheets to calculate the RMD and payout periods. Inherited IRAs An RMD may be required for an IRA, retirement plan account or Roth IRA inherited from the original owner. Retirement Topics - Beneficiary has information on taking RMDs from an inherited IRA or retirement account and reporting taxable distributions as part of gross income. Publication 559, Survivors, Executors and Administrators, can help those in charge of the estate complete and file federal income tax returns, and explains their responsibility to pay any taxes due on behalf of the decedent or person who has died. 2020 coronavirus-related distribution Since 2020 RMDs were waived, an account owner or beneficiary who received an RMD in 2020 had the option of returning it to their IRA or other qualified plan to avoid paying taxes on that distribution. A 2020 RMD that qualified as a coronavirus-related distribution may be repaid over a 3-year period or have the taxes due on the distribution spread over three years. A 2020 withdrawal from an inherited IRA could not be repaid to the inherited IRA but may be spread over three years for income inclusion. For more information see the Coronavirus Relief for Retirement Plans and IRAs page. Taxpayers can find forms, instructions, publications, Frequently Asked Questions regarding Required Minimum Distributions and other easy-to-use tools at IRS.gov.

https://www.irs.gov/newsroom/community-and-bilingual-volunteers-needed-to-provide-free-tax-help-in-2023

IR-2022-216, December 8, 2022 WASHINGTON — The Internal Revenue Service is looking for volunteers to train for the upcoming filing season to provide free tax help in communities across the country. Bilingual volunteers are particularly needed. Last year, more than 58,000 volunteers gave back to their communities by preparing more than 2.2 million federal income tax returns for individuals and families nationwide. For over 50 years, the IRS Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs have offered free tax preparation to people with low- to moderate-income that need help preparing their own tax returns. This includes people with disabilities and senior citizens. Many sites are also able to assist individuals for whom English is a second language. Volunteering can be exciting, educational and enjoyable. Here are a few good reasons to consider signing up to help: No previous experience required. Free online tax law training provided by IRS. Tax professionals (enrolled agents and accountants) can earn CPE credits. Flexible volunteer hours. Various volunteer locations. Various volunteer roles. Helping a community. Some volunteer sites now give volunteers the option to assist taxpayers virtually versus the normal in-person help they provide. This allows volunteers to help taxpayers complete their returns over the phone or online. Other volunteers will conduct a quality review with the taxpayer before the tax return is submitted to the IRS. Virtual volunteering is a great option for new volunteers, since they can ask experienced volunteers for help completing tax returns. Volunteer hours are flexible and free tax help sites are in such places as nearby community centers, libraries, schools and churches. Free training is available at Link & Learn Taxes. Volunteer sites may also offer classroom training generally between November and January. The instruction and training materials cover how to prepare individual income tax returns, both federal and state, and how to file them electronically. More information about the IRS volunteer tax preparation programs is available at IRS Tax Volunteers page. There, potential volunteers can submit their interest. The IRS will send them an invitation to a virtual orientation session where they will learn more about the program.

https://www.irs.gov/newsroom/irs-seeking-qualified-applicants-for-the-electronic-tax-administration-advisory-committee

IR-2022-215, December 7, 2022 WASHINGTON — The Internal Revenue Service is seeking qualified applicants for nomination to the Electronic Tax Administration Advisory Committee (ETAAC). Applications will be accepted through January 31, 2023. The ETAAC is an organized public forum for discussion of issues in electronic tax administration, such as prevention of identity theft and refund fraud. The committee supports the overriding goal that paperless filing should be the preferred and most convenient method of filing tax and information returns. ETAAC members work closely with the Security Summit, a joint effort of the IRS, state tax administrators and private-sector tax partners to fight electronic fraud and tax-related identity theft. The IRS is looking for qualified individuals who will serve three-year terms beginning in September 2023. Applicants should have experience in such areas as state tax administration, cybersecurity and information security, tax software development, tax preparation, payroll and tax financial product processing, systems management and improvement, and implementation of customer service initiatives. The IRS also strongly encourages applications from people representing the viewpoints of average taxpayers, including consumer advocates and others with an interest in tax issues. Nominations of qualified individuals may be made by letter and received from organizations or the individuals themselves. Applicants should complete the ETAAC applicationPDF and include a short statement of interest and a resume. Applicants should describe and document their qualifications, past and current affiliations, and dealings with cybersecurity and electronic tax administration. Applicants must complete and submit a tax check waiver form, and undergo an IRS practitioner background check and an FBI background check. Information on the tax check waiver and FBI background check will be provided upon receipt of application. More information can be found at Electronic Tax Administration Advisory Committee (ETAAC). ETAAC is a Federal Advisory Committee established by the Internal Revenue Service Restructuring and Reform Act of 1998. Questions about the ETAAC and the application process can be emailed to publicliaison@irs.gov.

https://www.irs.gov/newsroom/treasury-and-irs-propose-regulations-identifying-syndicated-conservation-easement-transactions-as-abusive-tax-transactions

IR-2022-214, December 6, 2022 WASHINGTON — The Treasury Department and Internal Revenue Service today issued proposed regulations identifying certain syndicated conservation easement (SCE) transactions as "listed transactions" – abusive tax transactions that must be reported to the IRS. In these transactions, investors typically acquire an interest in a partnership that owns land and then claim an inflated charitable contribution deduction based on a grossly overvalued appraisal when the partnership donates a conservation easement on the land. The IRS previously identified certain SCE transactions as listed transactions in Notice 2017-10. Recent court decisions in the Sixth Circuit and the U.S. Tax Court ruled that the IRS lacks the authority to identify listed transactions by notices, such as Notice 2017-10, and must instead identify such transactions by following the notice and public comment procedures that apply to regulations. Treasury and the IRS disagree with these decisionsPDF and continue to defend Notice 2017-10 and similar notices in litigation except in the Sixth Circuit. At the same time, however, Treasury and IRS issued the proposed regulations to eliminate any confusion regarding the need to report these transactions and to ensure that these decisions do not disrupt the IRS's ongoing efforts to combat abusive tax shelters throughout the nation. Treasury and the IRS intend to finalize these proposed regulations, after due consideration of public comments, in 2023 and intend to issue proposed regulations identifying additional listed transactions in the near future.

https://www.irs.gov/newsroom/get-ready-for-taxes-whats-new-and-what-to-consider-when-filing-in-2023

IR-2022-213, December 6, 2022 WASHINGTON — The Internal Revenue Service encouraged taxpayers to take important actions this month to help them file their 2022 federal tax returns. This is the second in a series of reminders to help taxpayers get ready for the upcoming tax filing season. A "Get Ready" page outlines steps taxpayers can take now to make tax filing easier in 2023. Here's what's new and some key items for taxpayers to consider before they file next year. Reporting rules changed for Form 1099-K. Taxpayers should receive Form 1099-K, Payment Card and Third Party Network Transactions, by January 31, 2023, if they received third party payments in tax year 2022 for goods and services that exceeded $600. There's no change to the taxability of income. All income, including from part-time work, side jobs or the sale of goods is still taxable. Taxpayers must report all income on their tax return unless it's excluded by law, whether they receive a Form 1099-K, a Form 1099-NEC, Nonemployee Compensation, or any other information return. Prior to 2022, Form 1099-K was issued for third party networks transactions only if the total number of transactions exceeded 200 for the year and the aggregate amount of these transactions exceeded $20,000. The American Rescue Plan Act of 2021 lowered the reporting threshold for third party networks that process payments for those doing business. Now a single transaction exceeding $600 can require the third party platform to issue a 1099-K. Money received through third party payment networks from friends and relatives as personal gifts or reimbursements for personal expenses is not taxable. The IRS cautions people in this category who may be receiving a Form 1099 for the first time – especially "early filers" who typically file a tax return during the month of January or early February – to be careful and make sure they have all of their key income documents before submitting a tax return. A little extra caution could save people additional time and effort related to filing an amended tax return. And if they have untaxed income on a Form 1099 that isn't reflected on the tax return they initially file, that could mean they need to submit a tax payment with an amended tax return. If the information is incorrect on the 1099-K, taxpayers should contact the payer immediately, whose name appears in the upper left corner on the form. The IRS cannot correct it. Some tax credits return to 2019 levels. This means that affected taxpayers will likely receive a significantly smaller refund compared with the previous tax year. Changes include amounts for the Child Tax Credit (CTC), Earned Income Tax Credit (EITC) and Child and Dependent Care Credit. Those who got $3,600 per dependent in 2021 for the CTC will, if eligible, get $2,000 for the 2022 tax year. For the EITC, eligible taxpayers with no children who received roughly $1,500 in 2021 will now get $500 in 2022. The Child and Dependent Care Credit returns to a maximum of $2,100 in 2022 instead of $8,000 in 2021. Visit Credits and Deductions for more details. No above-the-line charitable deductions. During COVID, taxpayers could take up to a $600 charitable donation tax deduction on their tax returns. However, in 2022, those who take a standard deduction may not take an above-the-line deduction for charitable donations. More people may be eligible for the Premium Tax Credit. For tax year 2022, taxpayers may still qualify for temporarily expanded eligibility for the premium tax credit. Eligibility rules changed to claim a tax credit for clean vehicles. Review the changes under the Inflation Reduction Act of 2022 to qualify for a Clean Vehicle Credit. Avoid refund delays and understand refund timing Many different factors can affect the timing of a refund after the IRS receives a return. Although the IRS issues most refunds in less than 21 days, the IRS cautions taxpayers not to rely on receiving a 2022 federal tax refund by a certain date, especially when making major purchases or paying bills. Some returns may require additional review and may take longer to process if IRS systems detect a possible error, the return is missing information or there is suspected identity theft or fraud. Also, the IRS cannot issue refunds for people claiming the EITC or Additional Child Tax Credit (ACTC) before mid-February. The law requires the IRS to hold the entire refund – not just the portion associated with EITC or ACTC. Last quarterly payment for 2022 is due on January 17, 2023 Taxpayers may need to consider estimated or additional tax payments due to non-wage income from unemployment, self-employment, annuity income or even digital assets. The Tax Withholding Estimator on IRS.gov can help wage earners determine if there is a need to consider an additional tax payment to avoid an unexpected tax bill when they file. Gather 2022 tax documents Taxpayers should develop a recordkeeping system − electronic or paper − that keeps important information in one place. This includes year-end income documents like Forms W-2 from employers, Forms 1099 from banks or other payers, Form 1099-K from third party payment networks, Form 1099-NEC for nonemployee compensation, Form 1099-MISC for miscellaneous income, or Form 1099-INT if you were paid interest, as well as records documenting all digital asset transactions. Ensuring their tax records are complete before filing helps taxpayers avoid errors that lead to processing delays. When they have all their documentation, taxpayers are in the best position to file an accurate return and avoid processing or refund delays or IRS letters. Sign in to Online Account An IRS Online Account lets taxpayers securely access their personal tax information, including tax return transcripts, payment history, certain notices, prior year adjusted gross income and power of attorney information. Filers can log in to verify if their name and address are correct. They should notify IRS if their address has changed. They must notify the Social Security Administration of a legal name change to avoid a delay in processing their tax return. Get banked to speed refunds with direct deposit The fastest way to get a tax refund is by filing electronically and choosing direct deposit. Direct deposit is faster than waiting for a paper check in the mail. It also avoids the possibility that a refund check could be lost, stolen or returned to the IRS as undeliverable. Don't have a bank account? Learn how to open an account at an FDIC-Insured bank or through the National Credit Union Locator Tool. Veterans should see the Veterans Benefits Banking Program (VBBP) for access to financial services at participating banks. Prepaid debit cards or mobile apps may allow direct deposit of tax refunds. They must have routing and account numbers associated with them that can be entered on a tax return. Taxpayers can check with the mobile app provider or financial institution to confirm which numbers to use. Bookmark resources Taxpayers can download Publication 5348, Get Ready to FilePDF, or Publication 5349, Year-Round Tax Planning is for EveryonePDF, for more information to help them get ready to file.

https://www.irs.gov/newsroom/irs-updates-frequently-asked-questions-about-the-2020-unemployment-compensation-exclusion

IR-2022-212, December 2, 2022 The Internal Revenue Service today updated frequently asked questions (FAQs) for the 2020 unemployment compensation exclusion in Fact Sheet 2022-39PDF. The updates are: Topic D: Amended Return (Form 1040-X): Combined question 1 and 2, removed question 3 and renumbered question 4 Topic E: Impact to Income, Credits, and Deductions: Question 2 Topic G: Receiving a Refund, Letter, or Notice: Questions 2, 3, 5, 8 and 9 Topic H: Finding the Unemployment Compensation Amount: Question 2 More information about reliance is available. IRS-FAQ

https://www.irs.gov/newsroom/irs-security-summit-partners-wrap-up-national-tax-security-awareness-week-with-steps-businesses-should-take-to-prevent-data-loss-fraud

IR-2022-211, December 2, 2022 WASHINGTON — To wrap up National Tax Security Awareness Week, the Internal Revenue Service and the Security Summit partners today urged businesses to remain vigilant against cyberattacks aimed at stealing their customer's personal information and other business data. The IRS continues to see instances where small businesses and others face a variety of identity-theft related schemes that try to obtain information that can be used to file fake business tax returns. For example, phishing schemes continue to target businesses as well as tax professionals and individual taxpayers. "Just like individuals and tax professionals, businesses of all types need to be on the lookout for attempts to steal information and data," said IRS Acting Commissioner Doug O'Donnell. "Businesses are especially attractive to cyberthieves because there is a potential to steal a lot of data. They may use the information to file a business tax return or use customer data for identity theft." The IRS, state tax agencies and the nation's tax software and tax professional industries operate cooperatively as the Security Summit to highlight data security and fight identity theft. Today marks the final day of the seventh annual week dedicated to information security and helpful tips for individuals, businesses and tax professionals. Cyber criminals target businesses of all sizes; knowing some cybersecurity basics and putting them in practice will help business owners protect their business and reduce the risk of a cyber-attack. Criminals can target a business's credit card or payment information, business identity information or employee identity information. Businesses are encouraged to follow best practices from the Federal Trade Commission, including: Use multi-factor authentication. Set security software to update automatically. Back up important files. Require strong passwords for all devices. Encrypt devices. More information is available at FTC's Cybersecurity for Small Businesses. Businesses should especially be alert to phishing email scams that attempt to trick employees into opening embedded links or attachments. IRS related scams may be sent to phishing@irs.gov so the IRS can try to track, stop or disrupt scams. To improve security, the IRS now masks sensitive information from business tax transcripts, which summarizes tax return information, to help prevent thieves from obtaining identifiable information that would allow them to file fake business tax returns. Only financial entries are fully visible. Other information has varying masking rules. For example, only the first four letters of each first and last name will display for individuals and businesses. Also, only the last four digits of the Employer Identification Number will be visible. The IRS also has the Form 14039-B, Business Identity Theft AffidavitPDF, that will allow companies to proactively report possible identity theft to the IRS when, for example, an e-filed tax return is rejected. Businesses should file the Form 14039-B if it receives a: Rejection notice for an electronically filed return because a return is already on file for that same period. Notice about a tax return that the entity didn't file. Notice about Forms W-2 filed with the Social Security Administration that the entity didn't file. Notice of a balance due that is not owed. This form will enable the IRS to respond to the business and work to resolve issues created by a fraudulent tax return. Businesses should not use the form if they experience a data breach but see no tax-related impact. For more information, see Identity Theft Central's business section. In addition to phishing and other scams, all employers should remain alert to Form W-2 theft schemes. For example, a thief may pose as a company executive who emails payroll employees and asks for a list of employees and their W-2s. Businesses often don't know they've been scammed until an employee reports that a fraudulent tax return has been filed. There's a special reporting procedure for employers who experience the W-2 scam. It's available in the Identity Theft Central's business section. Finally, Security Summit partners urge businesses to keep their EIN application information current. Changes of address or responsible party information may be reported using Form 8822-B. Changes in the responsible party must be reported to the IRS within 60 days. Current information can help the IRS find a point of contact to resolve identity theft and other issues. For more details and to learn more about this year's National Tax Security Awareness Week's efforts, visit IRS.gov/securitysummit.

https://www.irs.gov/newsroom/national-tax-security-awareness-week-day-4-choosing-a-unique-identity-protection-pin-adds-extra-safety-for-taxpayers

IRS YouTube Video: New Security Measures Help Protect Against Tax-Related Identity Theft  IR-2022-210, December 1, 2022 WASHINGTON — As part of a broader effort to increase security, the Internal Revenue Service and the Security Summit partners today reminded taxpayers they could get extra protection starting in January by joining the agency's Identity Protection Personal Identification Number (IP PIN) program. Anyone who has a Social Security number (SSN) or an Individual Taxpayer Identification Number (ITIN) and is able to verify their identity is eligible to enroll in the IP PIN program. More than 6.6 million taxpayers are now protecting themselves against tax-related identity theft by participating in the IP PIN program. Last year, the IRS made changes to the program to make it easier for more taxpayers to join. The fastest and easiest way to receive an IP PIN is by using the Get an IP PIN tool, which will be available in January. Today's reminder marks the fourth day of National Tax Security Awareness Week, which runs through Dec. 2. The Security Summit sponsors this annual observance as part of a larger effort between the IRS, the state tax agencies as well as the nation's tax software and tax professional industries. The Security Summit was established in 2015 to protect taxpayers and the nation's tax system against tax-related identity theft. This unique collaboration between the public and private sectors has increased mutual defenses against criminals trying to file fraudulent tax returns and steal refunds. One of the critical features of the IRS system involves an IP PIN, which is a six-digit number assigned to eligible taxpayers to help prevent the misuse of their Social Security number or Individual Taxpayer Identification Number on fraudulent federal income tax returns. An IP PIN is known only to the taxpayer and the IRS. Initially designed for confirmed victims of tax-related identity theft, the IP PIN program was expanded in 2021 to include any taxpayer nationwide who wants the additional protection and security of using an IP PIN to file tax returns with the IRS. "Preventing someone from filing a tax return under another person's name is the main reason we want people to have this special code," said IRS Acting Commissioner Doug O'Donnell. "We encourage people to apply for the code when the system opens up in January. This step provides an extra line of protection for taxpayers – and their tax return." An IP PIN helps the IRS verify a taxpayer's identity and accept their federal income tax returns, regardless of whether they are filing electronically or on paper. The online Get an IP PIN tool at IRS.gov/ippin displays the taxpayer's IP PIN. Any participating taxpayer will use the tool in each subsequent year to obtain a new number. The IRS urges any IP PIN applicant previously rejected during the identity authentication process to try applying again in 2023. The authentication process has been refined and improved, enabling many taxpayers screened out in the past to have a better chance of passing the authentication process. The Electronic Tax Administration Advisory Committee, or ETAAC, earlier this year highlighted the importance of the IP PIN to taxpayers and tax professionals. "The IP PIN is the number one security tool currently available to taxpayers from the IRS," the independent advisory group said in its annual report to Congress. "This tool is the key to making it more difficult for criminals to file false tax returns in the name of the taxpayer. In our view, the benefits of increased IP PIN use are many." The ETAAC also recommended the IRS continue to highlight and promote the IP PIN through a public awareness effort. As part of this effort, the IRS is highlighting the IP PIN as part of National Tax Security Awareness Week. The IRS also continues to raise awareness of special items including Publication 5367, IP PIN Opt-In Program for TaxpayersPDF, in English and Spanish, so that tax professionals can print and share the IP PIN information with clients. Special posters are also available in EnglishPDF and SpanishPDF. Key points about the IP PIN program Before applying, keep these key points in mind about the IP PIN program: For 2023, the Get an IP PIN tool is scheduled to launch on January 09, 2023. It's the fastest and easiest way to get an IP PIN. It is also the only option that immediately reveals the IP PIN to the taxpayer. Therefore, the IRS urges everyone to try the Get an IP PIN tool before pursuing other options. No identity theft affidavit is required for taxpayers opting in. Anyone who voluntarily applies for an IP PIN does not need to file Form 14039, Identity Theft Affidavit, with the IRS. The IP PIN is valid for one year. This means that each January, any participating taxpayer must obtain a newly generated IP PIN. Be sure to enter the IP PIN on any return, whether it is filed electronically or on paper. This includes any amended returns or returns for prior years. Doing so will help avoid processing delays or having the return rejected by the IRS. Anyone with a Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN) who can verify their identity is eligible for the IP PIN opt-in program. Any eligible family member can get an IP PIN. This includes the primary taxpayer (the person listed first on a tax return), the secondary taxpayer (on a joint return, the person listed second on the return), or any of their dependents. Never reveal an IP PIN to anyone. The only exception is a taxpayer who uses a trusted tax professional to file their return. Even then, only share the IP PIN with the trusted tax pro when it is time to sign and submit the return. The IRS will never ask for an IP PIN. Remember to watch out: Phone calls, emails and texts requesting an IP PIN are scams. Third parties offering to assist taxpayers to establish or re-gain access to IRS online accounts and asking for the taxpayer's personal information including address, Social Security number or Individual Taxpayer Identification number (ITIN) and photo identification use this information to sell to others, or file fraudulent tax returns, open credit accounts and more. Identity theft victims should still fill out an ID theft affidavit. Any confirmed tax-related identity theft victim still needs to file Form 14039 with the IRS if the agency rejects their e-filed tax return due to a duplicate SSN filing. The IRS will then investigate their case. Once the fraudulent tax return is removed from their account, the IRS will automatically mail an IP PIN to the confirmed victim at the start of the following calendar year. Because of security risks, confirmed identity theft victims cannot opt-out of the IP PIN program. Options for people who can't pass the online authentication process Two options are available for people who cannot pass the IRS online identity authentication process. One involves filing Form 15227, and the other requires a visit to an IRS Taxpayer Assistance Center (TAC). Unlike the online option, both of these options involve, for security reasons, a delay in receiving an IP PIN. Form 15227: For processing year 2023, individuals with an adjusted gross income of $73,000 or less and those filing jointly with an adjusted gross income (AGI) of $146,000 or less with access to a telephone can complete Form 15227PDF and either mail or fax it to the IRS. An IRS representative will then call them to verify their identity with a series of questions. Taxpayers choosing this option who pass the identity authentication process will generally receive their IP PIN in about a month. IRS Taxpayer Assistance Centers: Any taxpayer who is ineligible to file Form 15227 may make an appointment to visit an IRS Taxpayer Assistance Center (TAC). Anyone using this option must bring one form of picture identification and one other (does not need to be picture) form of identification. Because this is in-person identity verification, an IP PIN will be mailed to the taxpayer after their visit. Usually, allow three weeks for delivery. To find the nearest TAC, use the IRS Local Office Locator online tool or call 844-545-5640. For more details and to learn more about this year's National Tax Security Awareness Week's efforts, visit IRS.gov/securitysummit.

https://www.irs.gov/newsroom/new-law-increases-deduction-limit-for-corporate-cash-contributions-for-disaster-relief-irs-provides-recordkeeping-relief

IR-2021-27, January 29, 2021 WASHINGTON — The Internal Revenue Service today explained how corporations may qualify for the new 100% limit for disaster relief contributions and offered a temporary waiver of the recordkeeping requirement for corporations otherwise qualifying for the increased limit. The Taxpayer Certainty and Disaster Tax Relief Act of 2020 (TCDTRA of 2020), enacted December 27, temporarily increased the limit, to up to 100% of a corporation's taxable income, for contributions paid in cash for relief efforts in qualified disaster areas. Under the new law, qualified disaster areas are those in which a major disaster has been declared under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act. This does not include any disaster declaration related to COVID-19. Otherwise, it includes any major disaster declaration made by the President during the period beginning on January 1, 2020, and ending on February 25, 2021, as long as it is for an occurrence specified by the Federal Emergency Management Agency as beginning after December 27, 2019, and no later than December 27, 2020. For a list of disaster declarations, visit FEMA.gov. Qualified contributions must be paid by the corporation during the period beginning on January 1, 2020 and ending on February 25, 2021. Cash contributions to most charitable organizations qualify for this increased limit. Contributions made to a supporting organization or to establish or maintain a donor advised fund do not qualify. A corporation elects the increased limit by computing its deductible amount of qualified contributions using the increased limit and by claiming the amount on its return for the tax year in which the contribution was made. Corporations must meet the usual recordkeeping requirements that apply to charitable contributions, including obtaining a contemporaneous written acknowledgment (CWA) from the charity. The CWA must be obtained before the corporation files its return, but no later than the due date, including extensions, for filing that return. The TCDTRA of 2020 added an additional substantiation requirement for qualified contributions. For corporations electing this increased limit, a corporation's CWA must include a disaster relief statement, stating that the contribution was used, or is to be used, by the eligible charity for relief efforts in one or more qualified disaster areas. Because of the timing of the new law, the IRS recognizes that some corporations may have obtained a CWA that lacks the disaster relief statement. Accordingly, the agency will not challenge a corporation's deduction of any qualified contribution made before February 1, 2021, solely on the grounds that the corporation's CWA does not include the disaster relief statement. For additional details on the recordkeeping rules for substantiating gifts to charity, see Publication 526, Charitable Contributions, available on IRS.gov. More information about other coronavirus-related relief, can be found at IRS.gov.

https://www.irs.gov/newsroom/irs-updates-faqs-on-paid-sick-leave-credit-and-family-leave-credit

IR-2021-26, January 29, 2021 WASHINGTON — The Internal Revenue Service today posted updated FAQs about recent legislation that extended and amended tax relief to certain small- and mid-sized employers under the Families First Coronavirus Response Act (FFCRA). The FAQs are available at COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs. The updates to the FAQs cover how the COVID-related Tax Relief Act of 2020, enacted December 27, 2020, extends the availability of the tax credits created by the FFCRA to eligible employers for paid sick and family leave provided through March 31, 2021, as well as other amendments to the credits. The paid sick and family leave credits, which previously were available only until the end of 2020, have been extended for periods of leave taken through March 31, 2021. The paid sick leave credit is designed to allow qualified businesses – those with fewer than 500 employees and who pay "qualified sick leave wages" – to get a credit for wages or compensation paid to an employee who is unable to work (including telework) because of coronavirus quarantine or self-quarantine or has coronavirus symptoms and is seeking a medical diagnosis. Eligible employers may claim credit for paid sick leave provided to an employee for up to two weeks (up to 80 hours) at the employee's regular rate of pay up to $511 per day and $5,110 in total. In addition, an eligible employer can receive the paid sick leave credit for employees who are unable to work due to caring for someone with coronavirus or caring for a child because the child's school or place of care is closed, or the paid childcare provider is unavailable due to the coronavirus. Eligible employers may claim the credit for paid sick leave provided to an employee for up to two weeks (up to 80 hours) at 2/3 the employee's regular rate of pay, or up to $200 per day and $2,000 in total. Employers are also entitled to a paid family leave credit for paid family leave provided to an employee equal to 2/3 of the employee's regular pay, up to $200 per day and $10,000 in total. Up to 10 weeks of qualifying leave can be counted towards the family leave credit. Eligible employers are entitled to immediately receive a credit in the full amount of the paid sick leave and family leave plus related health plan expenses and the employer's share of Medicare tax on the leave provided through March 31, 2021. The refundable credit is applied against certain employment taxes on wages paid to all employees. Eligible employers may claim the credits on their federal employment tax returns (e.g., Form 941, Employer's Quarterly Federal Tax Return), but they can benefit more quickly from the credits by reducing their federal employment tax deposits. If there are insufficient federal employment taxes to cover the amount of the credits, an eligible employer may request an advance payment of the credits from the IRS by submitting a Form 7200, Advance Payment of Employer Credits Due to COVID-19PDF.

https://www.irs.gov/newsroom/eitc-awareness-day-critical-tax-credit-provides-a-significant-refund-boost-to-millions

IRS YouTube Videos: IRS EITC in 2021  English (Obsolete) Earned Income Tax Credit – Get it Right (Obsolete) IR-2021-25, January 29, 2021 WASHINGTON — The Internal Revenue Service and partners across the nation remind taxpayers about the Earned Income Tax Credit today on "EITC Awareness Day" 2021. The IRS and partners nationwide urge people to check to see if they qualify for this important credit. "This year marks the 15th annual EITC Awareness Day," said IRS Commissioner Chuck Rettig. "For more than 45 years, this tax credit has been helping hard-working Americans and their families. We want to thank our partners around the country who help us reach out to those low- and moderate-income people who may qualify and not even know about it." The IRS earlier announced that it will begin accepting 2020 tax returns on February 12. In the meanwhile, people can file their taxes electronically using IRS Free File or other name-brand software. Once filing season officially opens, the returns will be electronically submitted for processing. The IRS reminds taxpayers that the quickest way to get a tax refund is by filing electronically and choosing direct deposit for their refund. New look-back rule Under the COVID-related Tax Relief Act of 2020, taxpayers can use their 2019 earned income to figure their 2020 EITC if their 2019 earned income was more than their 2020 earned income. To qualify for EITC, people must have earned income, so this option may help workers who earned less in 2020, or received unemployment income instead of their regular wages, get bigger tax credits and larger refunds in the coming year. Also, any Economic Impact Payments received are not taxable or counted as income for purposes of claiming the EITC. Eligible individuals who did not receive the full amounts of both Economic Impact Payments may claim the Recovery Rebate Credit on their 2020 tax return. See IRS.gov/rrc for more information. Vital refund boost The EITC is the federal government's largest refundable federal income tax credit for low- to moderate-income workers. For those who qualify, and if the credit is larger than the amount of tax they owe, they will receive a refund for the difference. While the majority of those eligible claim EITC every year, IRS estimates that one of five eligible taxpayers do not claim the credit. Taxpayers earning $56,844 or less can see if they qualify using the EITC Assistant tool at IRS.gov/eitc. The EITC Assistant, available in English and Spanish, helps users determine if they are eligible, have a qualifying child or children and estimates the amount of the EITC they may get. If an individual doesn't qualify for the EITC, the Assistant explains why. Nationwide in 2020, more than 25 million taxpayers received over $62 billion in EITC. The average EITC amount received was $2,461 per return. The EITC is worth as much as $6,660 for a family with three or more children or up to $538 for taxpayers who do not have a qualifying child. Refunds By law, the IRS cannot issue refunds before mid-February for tax returns that claim the EITC or the Additional Child Tax Credit (ACTC). The IRS must hold the entire refund − even the portion not associated with EITC or ACTC and the Recovery Rebate Credit if applicable. This helps ensure taxpayers receive the refund they deserve and gives the agency more time to detect and prevent errors and fraud. Where's My Refund? on IRS.gov and the IRS2Go app will be updated with projected deposit dates for most early EITC/ACTC refund filers by February 22. Therefore, EITC/ACTC filers will not see an update to their refund status for several days after February 15. The IRS expects most EITC or ACTC related refunds to be available in taxpayer bank accounts or on debit cards by the first week of March, if they choose direct deposit and there are no other issues with their tax return. Workers who can claim the EITC Workers at risk for overlooking this important credit can include taxpayers: Without children Living in non-traditional families, such as a grandparent raising a grandchild Whose earnings declined or whose marital or parental status changed With limited English language skills Who are members of the armed forces Living in rural areas Who are Native Americans With disabilities or who provide care for a disabled dependent Life events or changes may make people eligible for certain tax benefits like the EITC. The IRS urges people to use the EITC Assistant to check their eligibility for this valuable credit. How to claim the EITC To get the EITC, workers must file a tax return and claim the credit. Eligible taxpayers are urged to claim the credit even if their earnings were below the income requirement to file a tax return. Free tax preparation help is available online and through volunteer organizations. Those eligible for the EITC have these options: Free File on IRS.gov. Free brand-name tax software is available that leads taxpayers through a question-and-answer format to help prepare the tax return and claim credits and deductions, if they are eligible. Free File also provides online versions of IRS paper forms, an option called Free File Fillable Forms, best suited for taxpayers comfortable preparing their own returns. Free tax preparation sites. EITC-eligible workers can seek free tax preparation at thousands of Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) sites. To locate the nearest site, use the search tool on IRS.gov, the IRS2go smartphone application, or call toll-free 800-906-9887. They should be sure to bring along all required documents and information. Find a trusted tax professional. The IRS also reminds taxpayers that a trusted tax professional can prepare their tax return and provide helpful information and advice. Tips for choosing a return preparer and details about national tax professional groups are available on IRS.gov. EITC recipients should be careful not to be duped by an unscrupulous return preparer. The IRS reminds taxpayers to be sure they have valid Social Security numbers (SSN) for themselves, their spouse, if filing a joint return, and for each qualifying child claimed for the EITC. The SSNs must be issued before the due date of the return, including extensions. There are special rules for those in the military or those out of the country. Avoid errors Taxpayers are responsible for the accuracy of their tax return even if someone else prepares it for them. Since the rules claiming the EITC can be complex, the IRS urges taxpayers to understand all of them. People can find help to make sure they are eligible by visiting a free tax return preparation site, or using Free File software or by using a paid tax professional. Beware of scams Be sure to choose a tax preparer wisely. Beware of scams that claim to increase the EITC refund. Scams that create fictitious qualifying children or inflate income levels to get the maximum EITC could leave taxpayers with a penalty. Visit IRS online IRS.gov is a valuable first stop to help taxpayers get it right this filing season. Information on other tax credits, such as the Child Tax Credit, is also available. Related items EITC Central at www.eitc.irs.gov, helpful resources for IRS partners and others. Publication 596, Earned Income Credit (EIC)PDF Tax Professionals, another place for valuable EITC resources and assistance.

https://www.irs.gov/newsroom/irs-offers-guidance-to-taxpayers-on-identity-theft-involving-unemployment-benefits

IR-2021-24, January 28, 2021 WASHINGTON — The Internal Revenue Service today urged taxpayers who receive Forms 1099-G for unemployment benefits they did not actually get because of identity theft to contact their appropriate state agency for a corrected form. States issue Forms 1099-G to the taxpayer and to the IRS to report what taxable income, such as refunds or unemployment benefits, were issued by state agencies. During 2020, millions of taxpayers were impacted by the COVID-19 pandemic through job loss or reduced work hours. Some taxpayers who faced unemployment or reduced work hours applied for and received unemployment compensation from their state. Under federal law, unemployment benefits are taxable income. However, scammers also took advantage of the pandemic by filing fraudulent claims for unemployment compensation using stolen personal information of individuals who had not filed claims. Payments made as a result of these fraudulent claims went to the identity thieves, and the individuals whose names and personal information were taken did not receive any of the payments. Taxpayers who receive an incorrect Form 1099-G for unemployment benefits they did not receive should contact the issuing state agency to request a revised Form 1099-G showing they did not receive these benefits. Taxpayers who are unable to obtain a timely, corrected form from states should still file an accurate tax return, reporting only the income they received. A corrected Form 1099-G showing zero unemployment benefits in cases of identity theft will help taxpayers avoid being hit with an unexpected federal tax bill for unreported income. The IRS previously issued guidance requested by states on identity theft guidance regarding unemployment compensation reporting. No Forms 1099-G should be issued to those individuals the states have identified as ID theft victims. Know the signs of identity theft Taxpayers do not need to file a Form 14039, Identity Theft Affidavit, with the IRS regarding an incorrect Form 1099-G. The identity theft affidavit should be filed only if the taxpayer's e-filed return is rejected because a return using the same Social Security number already has been filed. See Identity Theft Central for more information about the signs of identity theft and general steps that should be taken. Additionally, if taxpayers are concerned that their personal information has been stolen and they want to protect their identity when filing their federal tax return, they can request an Identity Protection Pin (IP PIN) from the IRS. An Identity Protection PIN is a six-digit number that prevents someone else from filing a tax return using a taxpayer's Social Security number. The IP PIN is known only to the taxpayer and the IRS, and this step helps the IRS verify the taxpayer's identity when they file their electronic or paper tax return. Reminder for those receiving unemployment benefits: Report your benefits when you file your tax return. The IRS reminds taxpayers that unemployment benefits are taxable, and they should watch their mail for a Form 1099-G. In some states, taxpayers may be able to receive the Form 1099-G by visiting their state's unemployment website where they signed up for account benefits to obtain their account information. Starting in January 2021, unemployment benefit recipients should receive a Form 1099-G, Certain Government Payments from the agency paying the benefits. The form will show the amount of unemployment compensation they received during 2020 in Box 1, and any federal income tax withheld in Box 4. Taxpayers report this information, along with their W-2 income, on their 2020 federal tax return. For more information on unemployment, see Unemployment Benefits in Publication 525.

https://www.irs.gov/newsroom/important-reminders-before-filing-2020-tax-returns

IR-2021-23, January 27, 2021 WASHINGTON — Following an unpredictable year with many changes and challenges, the Internal Revenue Service today shared important reminders for taxpayers who are about to file their 2020 federal tax returns. Choose direct deposit The safest, most accurate and fastest way to get a refund is to electronically file and choose direct deposit. Direct deposit means any tax refund is electronically deposited for free into a taxpayer's financial account. Eight out of 10 taxpayers get their refunds by using direct deposit. It is simple, safe and secure. This is the same electronic transfer system used to deposit nearly 98% of all Social Security and Veterans Affairs benefits into millions of accounts. Earned Income Tax Credit The Earned Income Tax Credit (EITC) can give qualifying workers with low-to-moderate income a substantial financial boost. EITC not only reduces the amount of tax someone owes but may give them a refund even if they don't owe any taxes or aren't required to file a return. People must meet certain requirements and file a federal tax return in order to receive this credit. The EITC assistant on IRS.gov can help people determine if they qualify. The IRS reminds taxpayers that they may elect to use their 2019 earned income to figure the EITC if their 2019 earned income is more than their 2020 earned income. For details, see Publication 596, Earned Income Credit. Taxpayers also have the option of using their 2019 income to figure the Additional Child Tax Credit for 2020. Taxable unemployment compensation Millions of Americans received unemployment compensation in 2020, many of them for the first time. This compensation is taxable and must be included as gross income on their tax return. Taxpayers can elect to have federal taxes withheld from their unemployment benefits or make estimated tax payments, but many do not take these options. In that case, taxes on those benefits will be paid when the 2020 tax return is filed. Taxes can be paid throughout the year. For safe and secure ways to pay taxes electronically go to IRS.gov/payments. Taxpayers can find more details on taxable unemployment compensation in Tax Topic 418, Unemployment Compensation, or in Publication 525, Taxable and Nontaxable Income, on IRS.gov. Interest is taxable income Many individual taxpayers who received a refund on their 2019 tax returns also received interest from the IRS. The interest payments were largely the result of the postponed filing deadline of July 15 due to the COVID-19 pandemic. The 2019 refund interest payments are taxable, and taxpayers must report the interest on their 2020 federal income tax return. The IRS will send a Form 1099-INT to anyone who receives interest totaling at least $10. The average refund interest amount is $18, but the amount for each taxpayer varies based on the tax refund that the taxpayer received. Form 1099-INT will be issued no later than February 1, 2021. Home office deduction The home office deduction is available to qualifying self-employed taxpayers, independent contractors and those working in the gig economy. However, the Tax Cuts and Jobs Act suspended the business-use-of-home deduction from 2018 through 2025 for employees. Employees who receive a paycheck or a W-2 exclusively from an employer are not eligible for the deduction, even if they are currently working from home. IRS Publication 587, Business Use of Your Home, provides more on the home office deduction. Workers moving into the gig economy Many people found different employment in 2020, including jobs in the gig economy. Taxpayers must report income earned in the gig economy on their tax return. However, gig-economy workers generally do not have taxes withheld from their pay as salaried workers normally do. The IRS encourages people earning income in the gig economy to consider making quarterly estimated tax payments to stay current with their federal tax obligations. Charitable donation deduction for people who don't itemize Individuals who take the standard deduction generally cannot claim a deduction for their charitable contributions. However, the CARES Act permits these individuals to claim a limited deduction on their 2020 federal income tax returns for cash contributions made to certain qualifying charitable organizations and still claim the standard deduction. Nearly nine in 10 taxpayers now take the standard deduction and could potentially qualify. Before making a donation, the IRS reminds people they can check the special Tax Exempt Organization Search (TEOS) tool on IRS.gov to make sure the organization is eligible for tax-deductible donations. Under this change, individuals can claim a deduction of up to $300 for cash contributions made to qualifying charities during 2020. This deduction does not apply to donated property. The maximum deduction is $150 for married individuals filing separate returns. More information is available in Publication 526, Charitable Contributions, on IRS.gov. Disasters such as wildfires, flooding or hurricanes Special tax law provisions may help taxpayers and businesses recover financially from the impact of a disaster, especially when the federal government declares their location to be a major disaster area. Some 2020 tax deadlines in certain counties have been extended into 2021 due to recent wildfires, hurricanes or flooding.

https://www.irs.gov/newsroom/irs-creates-new-chief-taxpayer-experience-officer-position-ken-corbin-to-lead-new-focus-to-improve-service-to-taxpayers

IR-2021-22, January 26, 2021 WASHINGTON — As part of a larger effort related to the Taxpayer First Act, the Internal Revenue Service announced today the creation of a new Chief Taxpayer Experience Officer position to help unify and expand efforts across the agency to serve taxpayers. Ken Corbin, currently the IRS Wage and Investment commissioner, will take on this new role while also continuing to serve in his position overseeing the agency’s largest operating division.  “I’m excited for this opportunity and, with my dedicated Taxpayer Experience Office team, look forward to helping the IRS continue to earn the trust and respect of every American. We want to help taxpayers and we will,” Corbin said. This announcement is the first senior leadership role created within the IRS under the Taxpayer First Act framework. The IRS continues work on the Taxpayer First Act, part of legislation passed in July 2019. The IRS delivered the Taxpayer First Act Report to CongressPDF earlier this month, providing a comprehensive set of recommendations that will reimagine the taxpayer experience, enhance employee training and restructure the organization to increase collaboration and innovation. The Taxpayer Experience Office, led by the Chief Taxpayer Experience Officer, reporting directly to the Commissioner, is one of the new roles envisioned in the multi-year plan. “This position is designed to ensure the views and experiences of taxpayers and their professional representatives are factored into all aspects of IRS operations,” said IRS Commissioner Chuck Rettig. “While taxpayer service has always been a priority for the IRS, we can do more. Having Ken Corbin in this new position will provide a different way of ensuring the taxpayer component is factored into all aspects of global IRS operations and business decisions in a way that’s never been done before. Every taxpayer and every taxpayer interaction are important, and Ken will make a significant difference going forward.” The position will work with business units and offices across the IRS, including Chief Counsel, the Independent Office of Appeals and the National Taxpayer Advocate. The role is envisioned as working in coordination with the National Taxpayer Advocate, which is an independent organization inside the agency that helps taxpayers with issues that can’t be resolved with the IRS. “The selection of Ken Corbin is an excellent choice,” said Erin Collins, National Taxpayer Advocate. “The Taxpayer Advocate Service’s statutory mission is to identify problems taxpayers experience in their dealings with the IRS and to make recommendations to mitigate them. With Ken serving in this role, TAS will have a dedicated resource on the IRS operations side whose job is to address taxpayer problems. I believe his broad knowledge of tax administration, his understanding of issues impacting taxpayers, taxpayer service and taxpayer rights, and his demonstrated commitment to do the right thing will be a benefit for all taxpayers. I look forward to working closely with Ken and his team on behalf of our nation’s taxpayers to improve taxpayer service.” The role will set the strategic direction for improving the taxpayer experience and identifying opportunities to make continuous improvements in real time for taxpayers and the tax professional community. This office will be focused on monitoring the taxpayer experience and providing other organizational units with information on changing taxpayer expectations, industry trends and ways to apply customer service best practices. Throughout this, there will be a continued emphasis on taxpayer rights. Corbin will assume this new role while also continuing his work in W&I, which includes overseeing the nation’s annual tax filing season set to begin February 12, 2021. This approach will ensure continuity during a critical filing season while also moving elements of the Taxpayer First Act forward. For more than three decades at the IRS, Corbin has served in many different roles serving taxpayers was a key component. As W&I Commissioner, he oversees more than 35,000 employees across the country and serves more than 150 million taxpayers through work on the annual filing season as well as taxpayer-facing operations including toll-free operations, tax return processing centers, Taxpayer Assistance Centers and tax forms, taxpayer correspondence and publication development. Corbin began his career in government service at the Atlanta Service Center in 1986. During his career, Corbin has acquired an extensive background in campus operations from 10 years in Submission Processing, three in Accounts Management, six in Compliance Services, three in the Taxpayer Advocate Services as well as numerous executive assignments across the agency. He holds bachelor’s degrees in chemistry and philosophy from Emory University in Atlanta, Georgia. He is a graduate of the fall 2008 Candidate Development Program.

https://www.irs.gov/newsroom/new-law-extends-covid-tax-credit-for-employers-who-keep-workers-on-payroll

IR-2021-21, January 26, 2021 WASHINGTON — The Internal Revenue Service urges employers to take advantage of the newly-extended employee retention credit, designed to make it easier for businesses that, despite challenges posed by COVID-19, choose to keep their employees on the payroll. The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted December 27, 2020, made a number of changes to the employee retention tax credits previously made available under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), including modifying and extending the Employee Retention Credit (ERC), for six months through June 30, 2021. Several of the changes apply only to 2021, while others apply to both 2020 and 2021. As a result of the new legislation, eligible employers can now claim a refundable tax credit against the employer share of Social Security tax equal to 70% of the qualified wages they pay to employees after December 31, 2020, through June 30, 2021. Qualified wages are limited to $10,000 per employee per calendar quarter in 2021. Thus, the maximum ERC amount available is $7,000 per employee per calendar quarter, for a total of $14,000 in 2021. Employers can access the ERC for the 1st and 2nd quarters of 2021 prior to filing their employment tax returns by reducing employment tax deposits. Small employers (i.e., employers with an average of 500 or fewer full-time employees in 2019) may request advance payment of the credit (subject to certain limits) on Form 7200, Advance of Employer Credits Due to Covid-19, after reducing deposits. In 2021, advances are not available for employers larger than this. Effective January 1, 2021, employers are eligible if they operate a trade or business during January 1, 2021, through June 30, 2021, and experience either: A full or partial suspension of the operation of their trade or business during this period because of governmental orders limiting commerce, travel or group meetings due to COVID-19, or A decline in gross receipts in a calendar quarter in 2021 where the gross receipts of that calendar quarter are less than 80% of the gross receipts in the same calendar quarter in 2019 (to be eligible based on a decline in gross receipts in 2020 the gross receipts were required to be less than 50%). Employers that did not exist in 2019 can use the corresponding quarter in 2020 to measure the decline in their gross receipts. In addition, for the first and second calendar quarters in 2021, employers may elect in a manner provided in future IRS guidance to measure the decline in their gross receipts using the immediately preceding calendar quarter (i.e., the fourth calendar quarter of 2020 and first calendar quarter of 2021, respectively) compared to the same calendar quarter in 2019. In addition, effective January 1, 2021, the definition of qualified wages was changed to provide: For an employer that averaged more than 500 full-time employees in 2019, qualified wages are generally those wages paid to employees that are not providing services because operations were fully or partially suspended or due to the decline in gross receipts.  For an employer that averaged 500 or fewer full-time employees in 2019, qualified wages are generally those wages paid to all employees during a period that operations were fully or partially suspended or during the quarter that the employer had a decline in gross receipts regardless of whether the employees are providing services.  Retroactive to the March 27, 2020, enactment of the CARES Act, the law now allows employers who received Paycheck Protection Program (PPP) loans to claim the ERC for qualified wages that are not treated as payroll costs in obtaining forgiveness of the PPP loan. For more information, see COVID-19-Related Employee Retention Credits: How to Claim the Employee Retention Credit FAQs​​​​​​.

https://www.irs.gov/newsroom/new-irs-submit-forms-2848-and-8821-online-offers-contact-free-signature-options-for-tax-pros-and-clients-sending-authorization-forms

IR-2021-20, January 25, 2021 WASHINGTON – The Internal Revenue Service today rolled out a new online option that will help tax professionals remotely obtain signatures from individual and business clients and submit authorization forms electronically. Tax professionals can find the new "Submit Forms 2848 and 8821 Online" on the IRS.gov/taxpros page. Tax professionals must have a Secure Access account, including a current username and password, or create an account in advance of submitting an online authorization form. "This online tool will allow tax professionals to safely obtain signatures from individual and business clients and upload authorization forms," said Chuck Rettig, IRS commissioner. "This is a first step in our ongoing efforts to expand digital options for tax professionals using electronic signatures and online uploads." The project is a result of the Taxpayer First Act that requires the IRS to expand use of taxpayers' electronic signatures on authorization forms. This online option also will help protect taxpayers and tax professionals by more easily allowing remote transactions. Form 2848, Power of Attorney and Declaration of RepresentativePDF, and Form 8821, Tax Information AuthorizationPDF, are two forms that allow taxpayers to authorize the IRS to disclose their tax information to third parties, such as, tax professionals. Form 2848 is a taxpayer's written authorization appointing an eligible individual to represent the taxpayer before the IRS, including performing certain acts on the taxpayer's behalf. It also authorizes the representative to receive related confidential tax information of the taxpayer from the IRS. Form 8821 is a taxpayer's written authorization designating a third party to receive and view the taxpayer's information. The taxpayer and the tax professional must sign Form 2848. If the tax professional uses the new online option, the signatures on the forms can be handwritten or electronic. Form 8821 needs only the taxpayer's signature. If using the new online option, the taxpayer's signature can be handwritten or electronic. If the tax professional uses the electronic signature option for a new client, the tax professional must first authenticate the client's identity. For details on this process, see the "Authentication" section in the online option's Frequently Asked Questions. Tax professionals may also use the "Submit Forms 2848 and 8821 Online" to withdraw previous authorizations. However, the new online option cannot be used to ask questions or address other issues. The process to mail or fax authorization forms to the IRS is still available. Signatures on mailed or faxed forms must be handwritten. Electronic signatures are not allowed. Most Forms 2848 and 8821 are recorded on the IRS's Centralized Authorization File (CAF). Authorization forms uploaded through this tool will be worked on a first-in, first-out basis along with mailed or faxed forms. The new online option negates the need for specific equipment (e.g., fax machines, scanners), saves tax professionals' time in obtaining signatures, reduces person-to-person contact, and allows complete flexibility in completing the form anywhere, anytime, for both the tax professional and client. The "Submit Forms 2848 and 8821 Online" option is a step towards to a broader IRS effort to expand options for electronic signatures on authorization forms as required by TFA. This summer, the IRS plans to launch the Tax Pro Account. Its initial functionality will allow tax professionals to initiate a third-party authorization on IRS.gov and send it to a client's IRS online account. Individual clients will access their online account and digitally sign the authorization, sending it to be recorded on the CAF. The IRS expects this new method will dramatically speed processing and allow for almost immediate authorization. More information about the Tax Pro Account and the extent of its initial functionality will be announced in the future. For additional information tax professionals may review the Uploading Forms 2848 and 8821 with Electronic Signatures webinar or Fact Sheet.

https://www.irs.gov/newsroom/get-a-federal-tax-refund-faster-with-direct-deposit

IRS YouTube Videos: Direct Deposit for Your Tax Refund − English IR-2021-19, January 22, 2021 WASHINGTON — The Internal Revenue Service today reminds taxpayers that the fastest way to get their tax refund is by filing electronically and choosing direct deposit. Direct deposit is free, fast, simple, safe and secure. Taxpayers can even split their refund to have it deposited into one, two or three different accounts. Eight out of 10 taxpayers get their refunds by using direct deposit. The IRS uses the same electronic transfer system to deposit tax refunds that is used by other federal agencies to deposit nearly 98% of all Social Security and Veterans Affairs benefits into millions of accounts. Direct deposit also avoids the possibility that a refund check could be lost or stolen or returned to the IRS as undeliverable. And it saves taxpayer money. It costs more than $1 for every paper refund issued, but only a dime for each direct deposit. Easy to use A taxpayer simply selects direct deposit as the refund method when using tax software or working with a tax preparer, and either they or their tax preparer type in their account and routing number. It's important to double check entries to avoid errors. The IRS reminds taxpayers they should only deposit refunds directly into U.S. affiliated accounts that are in their name, their spouse's name or both if it's a joint account. Many people do not use checks and may find their routing and account numbers on their online bank account or mobile app. Taxpayers may have a refund applied to their prepaid debit card. Many reloadable prepaid cards have account and routing numbers that could be provided to the IRS. But check with the financial institution to make sure the card can be used and verify the routing number and account number, which may be different from the card number. There are mobile apps that may allow for direct deposit of tax refunds. They must have routing and account numbers associated with them that can be entered on a tax return. Check with the mobile app provider to confirm what numbers to use. Have the bank routing and account number when having taxes prepared. The IRS does not have the ability to accept this information after a return is filed. Don't have a bank account? Visit the FDIC website for information on where to find a bank that can open an account online and how to choose the right account. Veterans can use the Veterans Benefits Banking Program (VBBP) for access to financial services at participating banks. Tax return preparers may also offer electronic payment options. Split refunds By using direct deposit, a taxpayer can split their refund into up to three financial accounts, including a bank or Individual Retirement Account. Part of the refund can even be used to purchase up to $5,000 in U.S. Series I Savings Bonds. A taxpayer can split their refund by using tax software or by using Form 8888, Allocation of RefundPDF (including Savings Bond Purchases), if they file a paper return. Some people use split refunds as a convenient option for managing their money, sending some of their refund to an account for immediate use and some for future savings. No more than three electronic tax refunds can be deposited into a single financial account or prepaid debit card. Taxpayers who exceed the limit will receive an IRS notice and a paper refund will be issued for the refunds exceeding that limit. Combining Electronic Filing plus direct deposit yields fastest refunds The safest and most accurate way to file a tax return is to file electronically. Many people may be eligible to file electronically for free. Most refunds are issued in less than 21 days, but some returns may take longer. Taxpayers can track their refund using Where's My Refund? on IRS.gov or by downloading the IRS2Go mobile app. Where's My Refund? is updated once daily, usually overnight, so there's no reason to check more than once per day or call the IRS to get information about a refund. Taxpayers can check Where's My Refund? within 24 hours after the IRS has received their e-filed return or four weeks after mailing a paper return. Where's My Refund? has a tracker that displays progress through three stages: Return Received, Refund Approved, and  Refund Sent. Whether through IRS Free File, commercially available software, or a tax preparer, electronic filing vastly reduces tax return errors, as the tax software does the calculations, flags common errors and prompts taxpayers for missing information.

https://www.irs.gov/newsroom/irs-urges-taxpayers-to-gather-tax-documents-now-for-smooth-filing-later

IR-2021-18, January 22, 2021 WASHINGTON —The Internal Revenue Service is reminding taxpayers that organizing tax records is an important first step for getting ready to prepare and file their 2020 tax return. Taxpayers should keep all necessary records, such as W-2s, 1099s, receipts, canceled checks and other documents that support an item of income, or a deduction or credit, appearing on their tax return. Taxpayers should develop a system that keeps all their important information together, which could include a software program for electronic records or a file cabinet for paper documents in labeled folders. Having records readily at hand makes preparing a tax return easier. To avoid refund delays, taxpayers should be sure to gather all year-end income documents so they can file a complete and accurate 2020 tax return. Most taxpayers will receive income documents near the end of January including: Forms W-2, Wage and Tax Statement Form 1099-MISC, Miscellaneous Income Form 1099-INT, Interest Income Form 1099-NEC, Nonemployee Compensation Form 1099-G, Certain Government Payments; like unemployment compensation or state tax refund Form 1095-A, Health Insurance Marketplace Statements View IRS account online Taxpayers can view their online account allowing them to access the latest information available about their federal tax account and most recently filed tax return through a secure and convenient tool on IRS.gov. This can help taxpayers if they need information from last year's return. Additionally, in the coming weeks, individuals with an account on IRS.gov/account will be able to view the amounts of the Economic Impact Payments they received as well as the latest information available about their federal tax account. Eligible individuals who did not receive the full amounts of both Economic Impact Payments may claim the Recovery Rebate Credit on their 2020 federal tax return. In order to claim the full amount of the Recovery Rebate Credit, taxpayers will need to know the amount of the Economic Impact Payments received. Visit Secure Access: How to Register for Certain Online Self-Help Tools for more information about how to create an account or how to reset the username or password. Remember unemployment compensation is taxable Millions of Americans received unemployment compensation in 2020, many of them for the first time. This compensation is taxable and must be included as gross income on their tax return. Taxpayers can expect to receive a Form 1099-G showing their unemployment income. Taxpayers can elect to have federal taxes withheld from their unemployment benefits or make estimated tax payments, but many do not take these options. In that case, taxes on those benefits will be paid when the 2020 tax return is filed. Therefore, taxpayers who did not have tax withheld from their payments may see a smaller refund than expected or even have a tax bill. Individuals who receive a Form 1099-G for unemployment compensation they did not receive should contact their state tax agency and request a corrected Form 1099-G. States should not issue Forms 1099-Gs to taxpayers they know to be victims of identity theft involving unemployment compensation. Taxpayers who are victims of identity theft involving unemployment compensation should not file an identity theft affidavit with the IRS. Individuals can find more details on taxable unemployment compensation in Tax Topic 418, Unemployment Compensation, or in Publication 525, Taxable and Nontaxable Income, on IRS.gov. Taxpayers can use 2019 income for Earned Income Tax Credit For taxpayers with income less than $56,844 in 2020, they may be eligible to claim the Earned Income Tax Credit. The EITC Assistant, available in English and Spanish, can help determine who is eligible. The EITC is as much as $6,660 for a family with children or up to $538 for taxpayers who do not have a qualifying child. And this tax season, there's a new rule that can help people impacted by a job loss or change in income in 2020. Under the COVID-related Tax Relief Act of 2020, taxpayers may elect to use their 2019 earned income to figure the credit if their 2019 earned income is more than their 2020 earned income. The same is true for the Additional Child Tax Credit. For details, see the instructions for Form 1040 PDFor Publication 596, Earned Income Credit. Electronic Filing makes filing easy The best way to file a complete and accurate return is to file electronically and there are several options for doing this – some at no cost. Visit IRS.gov/filing for more details about IRS Free File, Free File Fillable Forms, Free tax preparation sites or by finding a trusted tax professional. Free File is a great option for people who are only filing a tax return to claim the Recovery Rebate Credit, either because they didn't receive an Economic Impact Payment or did not receive the full amount. Use IRS.gov IRS tax help is available 24 hours a day on IRS.gov, the official IRS website, where people can find answers to tax questions and resolve tax issues online from the safety of their home. The Let Us Help You page helps answer most tax questions, and the IRS Services GuidePDF links to other important IRS services.

https://www.irs.gov/newsroom/employers-can-withhold-make-payments-of-deferred-social-security-taxes-from-2020

IR-2021-17, January 19, 2021 WASHINGTON — The Internal Revenue Service today released Notice 2021-11PDF addressing how employers who elected to defer certain employees' taxes can withhold and pay the deferred taxes throughout 2021 instead of just the first four months of the year. In response to a presidential memorandum signed August 8, 2020, Notice 2020-65 was issued on August 28, 2020, giving employers the option to defer certain employees' Social Security taxes from September 1, 2020, to December 31, 2020. This applied to employees paid less than $4,000 every two weeks, or an equivalent amount for other pay periods, with each pay period considered separately. The taxes, which are technically called Old Age, Survivors and Disability Insurance, or OASDI, are calculated at 6.2% of employees' wages. Any taxes deferred under Notice 2020-65 are withheld and paid ratably from employee wages between January 1, 2021, until April 30, 2021. However, the Consolidated Appropriations Act, 2021, signed into law December 27, extended the period that the deferred taxes are withheld and paid ratably. The period is now for the entire year − from January 1, 2021, through December31, 2021. Notice 2021-11 makes changes to Notice 2020-65 to reflect this extended period. Payments made by January 3, 2022, will be considered timely because December 31, 2021, is a legal holiday. Penalties, interest and additions to tax will now start to apply on January 1, 2022, for any unpaid balances Employees could see their deferred taxes being collected immediately. Employees should check with their organization's payroll point of contact on what their collection schedule will be. Additional tax relief related to the COVID-19 pandemic can be found on IRS.gov.

https://www.irs.gov/newsroom/2021-tax-filing-season-begins-feb-12-irs-outlines-steps-to-speed-refunds-during-pandemic

IR-2021-16, January 15, 2021 WASHINGTON ― The Internal Revenue Service announced that the nation's tax season will start on Friday, February 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns. The February 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits. This programming work is critical to ensuring IRS systems run smoothly. If filing season were opened without the correct programming in place, then there could be a delay in issuing refunds to taxpayers. These changes ensure that eligible people will receive any remaining stimulus money as a Recovery Rebate Credit when they file their 2020 tax return. To speed refunds during the pandemic, the IRS urges taxpayers to file electronically with direct deposit as soon as they have the information they need. People can begin filing their tax returns immediately with tax software companies, including IRS Free File partners. These groups are starting to accept tax returns now, and the returns will be transmitted to the IRS starting February 12. "Planning for the nation's filing season process is a massive undertaking, and IRS teams have been working non-stop to prepare for this as well as delivering Economic Impact Payments in record time," said IRS Commissioner Chuck Rettig. "Given the pandemic, this is one of the nation's most important filing seasons ever. This start date will ensure that people get their needed tax refunds quickly while also making sure they receive any remaining stimulus payments they are eligible for as quickly as possible." Last year's average tax refund was more than $2,500. More than 150 million tax returns are expected to be filed this year, with the vast majority before the Thursday, April 15 deadline. Under the PATH Act, the IRS cannot issue a refund involving the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) before mid-February. The law provides this additional time to help the IRS stop fraudulent refunds and claims from being issued, including to identity thieves. The IRS anticipates a first week of March refund for many EITC and ACTC taxpayers if they file electronically with direct deposit and there are no issues with their tax returns. This would be the same experience for taxpayers if the filing season opened in late January. Taxpayers will need to check Where's My Refund for their personalized refund date. Overall, the IRS anticipates nine out of 10 taxpayers will receive their refund within 21 days of when they file electronically with direct deposit if there are no issues with their tax return. The IRS urges taxpayers and tax professionals to file electronically. To avoid delays in processing, people should avoid filing paper returns wherever possible. Tips for taxpayers to make filing easier To speed refunds and help with their tax filing, the IRS urges people to follow these simple steps: File electronically and use direct deposit for the quickest refunds.   Check IRS.gov for the latest tax information, including the latest on Economic Impact Payments. There is no need to call.   For those who may be eligible for stimulus payments, they should carefully review the guidelines for the Recovery Rebate Credit. Most people received Economic Impact Payments automatically, and anyone who received the maximum amount does not need to include any information about their payments when they file. However, those who didn't receive a payment or only received a partial payment may be eligible to claim the Recovery Rebate Credit when they file their 2020 tax return. Tax preparation software, including IRS Free File, will help taxpayers figure the amount.   Remember, advance stimulus payments received separately are not taxable, and they do not reduce the taxpayer's refund when they file in 2021. Key filing season dates There are several important dates taxpayers should keep in mind for this year's filing season: January 15. IRS Free File opens. Taxpayers can begin filing returns through Free File partners; tax returns will be transmitted to the IRS starting Feb. 12. Tax software companies also are accepting tax filings in advance.   January 29. Earned Income Tax Credit Awareness Day to raise awareness of valuable tax credits available to many people – including the option to use prior-year income to qualify.   February 12. IRS begins 2021 tax season. Individual tax returns begin being accepted and processing begins.   February 22. Projected date for the IRS.gov Where's My Refund tool being updated for those claiming EITC and ACTC, also referred to as PATH Act returns.   First week of March. Tax refunds begin reaching those claiming EITC and ACTC (PATH Act returns) for those who file electronically with direct deposit and there are no issues with their tax returns.   April 15. Deadline for filing 2020 tax returns.   October 15. Deadline to file for those requesting an extension on their 2020 tax returns Filing season opening The filing season open follows IRS work to update its programming and test its systems to factor in the second Economic Impact Payments and other tax law changes. These changes are complex and take time to help ensure proper processing of tax returns and refunds as well as coordination with tax software industry, resulting in the February 12 start date. The IRS must ensure systems are prepared to properly process and check tax returns to verify the proper amount of EIP's are credited on taxpayer accounts – and provide remaining funds to eligible taxpayers. Although tax seasons frequently begin in late January, there have been five instances since 2007 when filing seasons did not start for some taxpayers until February due to tax law changes made just before the start of tax time.

https://www.irs.gov/newsroom/irs-free-file-available-today-claim-recovery-rebate-credit-and-other-tax-credits

IRS YouTube Video: Do Your Taxes for Free with Free File - English | Spanish (obsolete) IR-2021-15, January 15, 2021 WASHINGTON — IRS Free File – online tax preparation products available at no charge – launched today, giving taxpayers an early opportunity to claim credits like the Recovery Rebate Credit and other deductions, the Internal Revenue Service announced. Leading tax software providers make their online products available for free as part of a 19-year partnership with the Internal Revenue Service. There are nine products in English and two in Spanish. “As we continue to confront the COVID-19 pandemic, IRS Free File and certain other similar online tax preparation products such as MilTax – Tax Services for the Military offered through the Department of Defense − offers taxpayers a free way to do their taxes from the safety of their own home and claim the tax credits and deductions they are due,” said Chuck Rettig, IRS Commissioner. “We encourage eligible taxpayers to take a look at using Free File, MilTax and similar free online tax preparation products this year, to follow the lead of over 4 million people who took advantage of these free services just last year. An IRS tax refund is often the single largest payment families receive during the year. We know how critical that refund is, especially this year." IRS Free File online products are available to any taxpayer or family who earned $72,000 or less in 2020. MilTax online software will be available on January 19, 2021. IRS Free File providers will accept completed tax returns and hold them until they can be filed electronically once the IRS begins processing returns. The Free File Fillable Forms, the electronic version of IRS paper forms, also will be available later when the filing season begins. This product is best for people comfortable preparing their own taxes and is safe and secure. How IRS Free File Online works Each IRS Free File provider sets its own eligibility rules for products based on age, income and state residency. However, for those who make $72,000 or less, they will find at least one product that matches their needs, and usually more. Some providers also offer free state preparation. Active duty military can use any IRS Free File product if their income was $72,000 or less. Here's a step-by-step overview of how to find the right Free File product: Go to IRS.gov/freefile. Use the "Free File Online Look up" tool for help in finding the right product, or Review each offer by a provider by using the 'Browse All Offers' tool. Select a product. Follow links to the provider's website to begin. No computer? No problem. IRS Free File products support mobile phone access. Recovery Rebate Credit and other benefits IRS Free File is all taxpayers need to claim the Recovery Rebate Credit and other tax benefits such as the Earned Income Tax Credit (EITC). In 2020, the IRS issued two Economic Impact Payments as part of the economic stimulus efforts. The first payments were up to $1,200 person and $500 per qualifying child. The second payments were up to $600 per eligible person and $600 per qualifying child. For 2021, eligible taxpayers who did not receive the full amount, can claim it as the Recovery Rebate Credit when they file their 2020 tax return. Use IRS Free File to file and claim this important benefit. IRS Free File also can be used by working families to claim EITC, which provides a refundable tax credit based on income and family size. Taxpayers also are reminded that unemployment benefits paid by states are taxable income. States should send Forms 1099-G to those who received jobless benefits. IRS Free File participants For 2021, these providers are participating in IRS Free File: 1040Now, ezTaxReturn.com, FreeTaxReturn.com, FileYourTaxes.com, Intuit (TurboTax), On-Line Taxes (OLT.com), TaxAct, TaxHawk (FreeTaxUSA), TaxSlayer. For 2021, the following providers have IRS Free File products in Spanish: ezTaxReturn.com, TaxSlayer (Available after January 18).

https://www.irs.gov/newsroom/businesses-have-feb-1-deadline-to-provide-forms-1099-misc-and-1099-nec-to-recipients

IR-2021-14, January 14, 2021 WASHINGTON — The Internal Revenue Service today reminded businesses and other payors that the revised Form 1099-MISC, Miscellaneous IncomePDF, and the new Form 1099-NEC, Nonemployee CompensationPDF, must be furnished to most recipients by February 1, 2021. Redesigned Form 1099-MISC The IRS revised Form 1099-MISC for the 2020 tax year to accommodate the creation of a new Form 1099-NEC. The redesigned 1099-MISC has different box numbers for reporting certain income. Businesses must send Form 1099-MISC to recipients by February 1, 2021, and file it with the IRS by March 1 (March 31 if filing electronically). If businesses are using Forms 1099-MISC to report amounts in box 8, Substitute Payments in Lieu of Dividends or Interest, or box 10, Gross Proceeds Paid to An Attorney, there is an exception to the normal due date. Those forms are due to recipients by February 16, 2021. New Form 1099-NEC Form 1099-NEC is a new form for tax year 2020 for nonemployee compensation of $600 or more to a payee. This form should be filed with the IRS, on paper or electronically, and sent to recipients by February 1, 2021. There is no automatic 30-day extension to file Form 1099-NEC. However, an extension to file may be available under certain hardship conditions. Also, nonemployee compensation may be subject to backup withholding if a payee has not provided a taxpayer identification number to the payer or the IRS notifies the payer that the Taxpayer Identification Number provided was incorrect. Deadlines help fraud detection The due dates for information returns, like Forms 1099-MISC and 1099-NEC help the IRS more easily detect refund fraud by verifying income that individuals report on their tax returns. Payors can help support that process, and avoid penalties, by filing the forms on time and without errors. The IRS recommends e-file as the quickest, most accurate and convenient way to file these forms. For more information, the instructions for Forms 1099-MISC and 1099-NEC are available on IRS.gov.

https://www.irs.gov/newsroom/irs-reminds-taxpayers-to-make-final-estimated-tax-payment-for-2020

IR-2021-13, January 14, 2021 WASHINGTON − Taxpayers who paid too little tax during 2020 can still avoid a tax-time bill and possible penalties by making a quarterly estimated tax payment now, directly to the Internal Revenue Service. The deadline for making a payment for the fourth quarter of 2020 is Friday, January 15, 2021. Income taxes are pay-as-you-go. This means that by law, taxpayers are required to pay most of their taxes during the year as income is received. There are two ways to do this: Withholding from paychecks, pension payments, Social Security benefits or certain other government payments including unemployment compensation in some cases. This is how most people pay most of their tax. Making quarterly estimated tax payments throughout the year to the IRS. Self-employed people and investors, among others, often pay tax this way. Either method can help avoid a surprise tax bill at tax time and the accompanying penalties that often apply. If a taxpayer failed to make required quarterly estimated tax payments earlier in the year, making a payment to cover these missed payments, as soon as possible, will usually lessen and may even eliminate any possible penalty. The IRS recommends that everyone check their possible tax liability by using the IRS Tax Withholding Estimator. This online tool allows taxpayers to see if they are withholding the right amount and find out if they need to make an estimated tax payment. Form 1040-ES, available on IRS.gov, includes a worksheet for figuring the right amount to pay as well. This is especially important for anyone who owed taxes when they filed their 2019 return. Taxpayers in this situation may include those who itemized in the past, two wage-earner households, employees with non-wage sources of income and those with complex tax situations. Taxpayers who owed taxes when they last filed and who did not adjust their 2020 withholding may find that they owe taxes again, and even a penalty, when they file their 2020 return next year. Making a quarterly estimated tax payment now can help. Taxpayers should know: Most income is taxable, so taxpayers should gather income documents such as Forms W-2 from employers, Forms 1099 from banks and other payers, and records of virtual currencies or other income. This also includes unemployment income, refund interest and income from the gig economy. Unemployment compensation is taxable income. If you received unemployment compensation and the state did not withhold federal income taxes, an estimated tax payment should be made. In addition, various financial transactions, especially late in the year, can often have an unexpected tax impact. Examples include year-end and holiday bonuses, stock dividends, capital gain distributions from mutual funds and stocks, bonds, virtual currency, real estate or other property sold at a profit. Publication 505, Tax Withholding and Estimated Tax, has additional details, including worksheets and examples, that can be especially helpful to those who have dividend or capital gain income, owe alternative minimum tax or self-employment tax, or have other special situations. The fastest and easiest ways to make an estimated tax payment is to do so electronically using IRS Direct Pay, the IRS2Go app or the Treasury Department's Electronic Federal Tax Payment System (EFTPS). For information on other payment options, visit IRS.gov/payments. If paying by check, be sure to make the check payable to the "United States Treasury." Though it's too early to file a 2020 return, it's never too early to get ready for the tax-filing season ahead. For more tips and resources, check out the Get Ready page on IRS.gov.

https://www.irs.gov/newsroom/irs-selects-new-irsac-members-for-2021

IR-2021-12, January 13, 2021 WASHINGTON — The Internal Revenue Service today announced the appointment of 13 new members to the Internal Revenue Service Advisory Council. The IRSAC, established in 1953, is an organized public forum for IRS officials and representatives of the public to discuss various issues in tax administration. The council provides the IRS commissioner with relevant feedback, observations and recommendations. It will submit its annual report to the agency at a public meeting in November 2021. The IRS strives to appoint members to the IRSAC who represent the taxpaying public, the tax professional community, small and large businesses, tax exempt and government entities and information reporting interests. The following people were appointed to serve three-year appointments on the council beginning this month: Jeremiah Coder −Tax Director, PwC, Washington, D.C. − Coder has 15 years of technical tax expertise focused on domestic, international and state tax policy issues spanning different industries, client types, issues and countries. Currently, he provides policy and technical advice to clients regarding international, U.S. and Organization for Economic Cooperation and Development tax developments, including digital taxation and information reporting programs like the Common Reporting Standard/Foreign Account Tax Compliance Act, Country-by-Country Reporting, International Compliance Assurance Program, and other international initiatives dealing with the supply of information to tax authorities. He previously worked as an adviser to the OECD and at a global law firm. Coder represents large business and international industries and is a member of the American Bar Association, Federal Bar Association, International Fiscal Association and Business at OECD Tax Committee. Sam Cohen − Government Affairs/Legal Officer, Santa Ynez Band of Chumash Mission Indians, Santa Ynez, Calif. − Cohen is chief legal and government affairs officer for a federally recognized Indian tribe, the Santa Ynez Band of Chumash Mission Indians. He advises the tribe and its members on the application of federal, state and tribal laws. He has worked with IRS Indian Tribal Governments Office on a notice for draw-down loans and a notice for refunding tribal government bonds. Cohen has also worked on a $93 million Tribal Economic Development Bond issuance for a new hotel tower and parking garage. He is a member of the General Welfare Exclusion Subcommittee of the Treasury Tribal Advisory Committee. Cohen represents Indian Tribal Governments. Jodi Kessler − Assistant Director Tax, MIT, Cambridge, Mass. − Kessler has 13 years of experience in higher education focusing on all aspects of taxation, including federal, state, local and international filing rules and requirements; gifts to and from a university; rules on withholding and reporting of all types of payments made by a university; and providing information on entity creation and dissolution. Kessler has collaborated with several departments to advise on all types of tax rules and informational reporting at universities including The Ohio State University and Harvard University. At the Massachusetts Institute of Technology, she analyzed reporting and developed improved processes for reporting payments including employee compensation, service and non-service scholarships and fellowships, independent contractors and foreign recipients; she has developed trainings on the tax implications and reporting requirements of payments MIT issues to both U.S. tax residents and nonresidents. Kessler represents colleges and universities. She is a member of the National Association of College & University Business Officers. Steve Klitzner – Attorney, Steven N. Klitzner, P.A., North Miami Beach, Fla.− Klitzner has more than 20 years of experience representing taxpayers before the IRS. He devotes 100% of his law practice to tax resolution and controversy work. He is admitted to the U.S. Supreme Court, U.S. District Court Southern District of Florida, and U.S. Tax Court. Klitzner has had multiple speaking engagements with the American Society of Tax Problem Solvers and teaches continuing education courses to certified public accountants, enrolled agents and attorneys around the country. Klitzner represents small business and individual taxpayers and is a member of the Florida Bar Tax Section, American Society of Tax Problem Solvers, Advisory Board of the Tax Freedom Institute, South Florida Tax Litigation Association and Florida Lawyers Network. Charles Parr – Partner, ABIP CPAs & Advisors, San Antonio, Texas − Parr has over 40 years of diversified tax and audit experience with small to large publicly and privately held companies, both in private practice and with two Big-Four Firms; merger and acquisition representation, due diligence review, feasibility studies, financing and tax consultation; litigation support in bankruptcy and non-bankruptcy proceedings on corporate reorganizations and other technical tax testimony; medium to large corporate bankruptcy "turnaround" reorganization planning, business management consultation, and related tax compliance; planning, supervision of information gathering, and technical review for compliance and information reporting of U.S. based multi-nationals and non-U.S. multi-nationals operating within the U.S; feasibility study, implementation and ongoing compliance filings for large and small Foreign Sales Corporations and Interest Charge – DISCS; domestic and foreign large-case corporate IRS examination representation and coordination with legal counsel in provision of information, technical research and expert witness testimony. Parr represents large business and international industries and is a member of American Institute of Certified Public Accountants and the Texas Society of CPAs. Luis Parra – CEO, Key Accounting and Tax Services, Bronx, N.Y. − Parra has 20 years of experience in tax audit representation, accounting, taxes, budget planning for diverse individuals, and business and non-profit organizations in the Northeast and Caribbean. Parra previously worked for 12 years in payroll in Puerto Rico. He is an enrolled agent who has worked with field and office examinations, appeals examinations, collections and representation. Parra has been a tax instructor for more than 20 years, teaching in English and Spanish throughout the country through his continuing education company, "American Tax Club, Inc." (Ameritax). He serves as a Spanish instructor designated by the IRS Stakeholder Liaison Office in New York and the Latino Tax Professionals Association. Parra represents small business and individual taxpayers and is founder and past president of the Latino Association of Tax Preparers. He is also a member of the National Association of Tax Professionals, National Association of Enrolled Agents, Latino Tax Professionals Association, and United States Hispanic Chamber of Commerce. Phil Poirier − Vita Volunteer; Consulting Services, Del Mar, Calif. − Poirier has been a Senior Fellow with the Center for Social Development at Washington University in St. Louis. His work focuses on finding ways to improve the tax and financial lives of low- and moderate-income Americans, including active-duty military service members. He has experience as a Volunteer Income Tax Assistance preparer with low income and military taxpayers; national VITA organizations on program issues, including cybersecurity; with Washington University in assisting taxpayers in improving their financial lives; and with companies focused on the development of tax-related online tools and mobile user experiences. Poirier has extensive background in tax, electronic tax administration, consumer and professional online and mobile offerings, and regulatory/policy issues in the digital economy. For almost 20 years, he worked with Intuit in legal, policy, business development and compliance positions. Poirier is former chair of the IRS Electronic Tax Administration Advisory Committee. Poirier represents VITA and the digital services community and is a member of the Taxpayer Opportunity Network. Seth Poloner − Executive Director/Global Head of Operational Tax Advisory Group, Morgan Stanley, New York, N.Y. − Poloner has 16 years of experience as a tax attorney at both a large international law firm and a major global financial services firm. In his current role, he leads a team of tax attorneys and professionals responsible for legal interpretation, advice and risk management related to global operational taxes. He provides advice on all aspects of U.S. information reporting and withholding, including non-resident alien and backup withholding; Forms 1042-S and 1099 reporting, including cost basis; validation of Forms W-9 and W-8; and the Foreign Account Tax Compliance Act, Qualified Intermediary and Qualified Derivatives Dealer regimes. Poloner also provides business unit advisory support for the firm's retail wealth management business, including advising with respect to new products and transactions, addressing client inquiries and drafting and updating tax-related policies and communications. Poloner represents the information reporting and withholding community and is a member of the Securities Industry and Financial Markets Association Tax Compliance Committee. Dawn Rhea − Legal Officer, Evergreen Financing Management/Hampstead Ventures, Inc. Woodland Hills, Calif. − Rhea's practice area focuses on complex legal and tax issues arising in the context of financing, asset and equity acquisitions and mergers. Rhea was previously a National Tax Director with Moss Adams LLP where her practice focused on tax controversy and the complex tax issues arising in the context of mergers and acquisitions. She worked with middle market taxpayers, largely comprised of West Coast-based C corporations, S Corporations and partnerships, including many Silicon Valley-based high-tech companies, as well as the shareholders, partners and individual owners of such entities in sales to private equity, assets/equity sales to strategic investors; privately owned foreign companies in venture capital financing. She was a leader in the firm's tax controversy and strategic planning, transaction cost and 280G practices. Rhea represents large business and international industries and is a member of the California Bar, the New York Bar, the American Bar Association and the Society of Louisiana CPAs. Paul Sterbenz − Director of Information Reporting, Fifth Third Bank, Cincinnati, Ohio − Sterbenz has 25 years of experience performing information reporting and withholding in the financial services industry. He manages consultation and support to areas of the bank responsible for the production and filing of information reports (including Forms 1099 series, 1042-S, etc.) and the production and filing of annual withholding tax returns (including Forms 945 and 1042). Sterbenz is responsible for managing the bank's Foreign Bank and Financial Account Report filings and manages the bank's relationship with IRS and other tax authorities with respect to audits and process issues including the corporation's response to penalty and B notices. He monitors regulatory and legislative developments and advises management on the potential tax implications of new legislation, regulations and rulings. Sterbenz is a member of the American Banking Association's Information Reporting Advisory Group and was the moderator of the 2019 Tax Reporting & Withholding Conference held in Washington, D.C. Sterbenz represents the information reporting community and is a member of the American Bankers Association. Kathryn Tracy − Managing Partner, Kat & Bud Enterprises LLC, Buckeye, Ariz. − Tracy has owned and operated an accounting and income tax firm since 1992. Her accounting practice offers full-service electronic bookkeeping, accounting and tax preparation services. She prepares over 1,600 returns annually for individuals, corporations, partnerships, non-profit organizations, and estates and trusts. She also prepares information reporting returns. Tracy is a former IRS Revenue Agent (1987-1992) with individual and business audit experience, including payroll returns. She played an active part in the fraud-non-filer group researching complex tax law issues. Tracy works with the IRS local Taxpayer Advocate Service office and speaks to various professional groups throughout Arizona. She has been a VITA volunteer and instructor for 32 years and served on team that wrote the 2019 and 2020 Form 6744 VITA/TCE Volunteer Assistor's Test/Retest. Tracy represents VITA and individual taxpayers and is a member of the National Association of Enrolled Agents. Wendy Walker − Solution Principal, Sovos, Minneapolis, Minn. − Walker is Solution Principal at Sovos, a global tax software company. She helps ensure customers (including financial institutions and insurers, multinational corporations, cryptocurrency exchanges, gig platforms and more) remain compliant with their obligations., Walker appears regularly in business and industry publications such as Law360, CPA Practice Advisor and Cointelegraph. She previously worked at J.P. Morgan Chase, where she led the team responsible for the implementation of operational policies and processes for Forms W-8 collection and validation in corporate procurement, and where she was responsible for information reporting of mortgage servicing and default related transactions, as well as oversight of the production and filing of more than 12 million Forms 1098, 1099-INT, 1099-A, 1099-C, 1042-S and 1099-MISC annually. Walker represents the information reporting community and is a member of the Chamber of Digital Commerce, Council for Electronic Revenue Communication Advancement and National Association of Computerized Tax Processors. Katrina Welch − Dallas, Texas − Welch has over 25 years of tax, management and strategic decision-making experience. Most recently, she worked for Ecolab, the global leader in water, hygiene and energy technologies and services, with operations in more than 170 countries; she led a team of tax professionals with strategic and operational responsibility for planning, tax provision, compliance and controversy, as well as global mergers and acquisitions. Previously she was the leader of global tax function at Texas Instruments. She served as the Tax Executives Institute 2019-2020 International President and has been a TEI member for over 20 years, previously serving as TEI Senior Vice President, a member of TEI Executive Committee and on the TEI Board of Directors. Welch represents large business and international industries and is a member of the Tax Executives Institute. The 2021 IRSAC Chair is Ben Deneka, program manager with The Tax Institute at H&R Block. In addition to managing H&R Block's relationship with the IRS, Deneka represents H&R Block in the Security Summit and various industry working groups, including CERCA. He currently resides in Pittsburgh, Pa. For more information, please visit the IRSAC overview page on IRS.gov. Related items: IRSAC 2020 Public ReportPDF

https://www.irs.gov/newsroom/national-taxpayer-advocate-delivers-annual-report-to-congress-focuses-on-taxpayer-impact-of-covid-19-and-irs-funding-needs

IR-2021-11, January 13, 2021 WASHINGTON — National Taxpayer Advocate Erin M. Collins today released her  2020 Annual Report to Congress , focusing on the unprecedented challenges taxpayers faced in filing their tax returns and receiving refunds and stimulus payments during a year consumed by the COVID-19 pandemic. The report also finds that a roughly 20% inflation-adjusted reduction in the IRS's budget since fiscal year (FY) 2010 has left the agency with antiquated technology and inadequate staffing levels to meet taxpayers' needs. As part of the report, Collins released the fourth edition of the National Taxpayer Advocate's "Purple Book," a compilation of 66 legislative recommendations designed to strengthen taxpayer rights and improve tax administration. "During 2020, the COVID-19 pandemic affected almost all facets of our lives, and U.S. tax administration was no exception," Collins said in releasing the report. "Taxpayers could not meet in person with their tax return preparers. IRS personnel who open and process tax returns and answer the toll-free telephone lines had to follow social distancing guidelines and stay-at-home orders, limiting their ability to assist taxpayers. And Congress assigned the IRS the task of issuing two rounds of stimulus payments, stretching its resources even further." The 2020 filing season and Economic Impact Payments The report says the IRS in most cases "can effectively handle whatever it can automate," and as a result, most taxpayers were well served. As of November 20, 2020, the IRS had received about 169 million individual income tax returns, including about 8.4 million that were filed solely to claim stimulus payments (referred to by the IRS as "economic impact payments" or "EIPs"). About 90% of returns were e-filed and therefore were not delayed by the pandemic. Similarly, the overwhelming majority of EIPs were issued by direct deposit or automated mailings and were successfully and timely transmitted. However, the report says millions of taxpayers experienced major problems, including the following: Refund delays due to COVID-19 processing backlogs. About 16 million individual income taxpayers filed paper tax returns. Because the IRS could not fully staff its mail facilities, some taxpayers have waited six months or longer for the IRS to process their returns. Most taxpayers receive refunds, which in recent years have averaged more than $2,500. On December 31, the IRS website indicated there were still 7.1 million unprocessed individual returns and 2.3 million unprocessed business returns as of November 24.   Refund delays due to IRS fraud detection filters. The IRS passes all returns claiming refunds through a series of filters designed to detect fraudulent income or identity theft-based claims. These fraud detection filters in recent years have generated "false positive" rates substantially greater than 50% (meaning that most refund claims frozen by the filters are ultimately found to be legitimate). This problem was compounded in 2020 because the IRS notifies taxpayers of refund holds by written correspondence, and the IRS was delayed both in sending notices and in processing taxpayer responses. For about 25% of the returns flagged for income verification, refunds took longer than 56 days. For about 18% of the returns flagged for identity verification, refunds took longer than 120 days.   EIP underpayments. In accordance with the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the IRS issued more than 160 million EIPs. However, millions of eligible individuals did not receive some or all of the EIPs for which they were eligible despite a statutory directive that the IRS issue the payments "as rapidly as possible." Initially, the IRS took the position that it generally would not correct EIP mistakes in 2020. As the year progressed, the IRS agreed to fix some categories of EIP problems, mostly those it could fix via automation. Still, the IRS was unable to resolve many cases in 2020, requiring eligible individuals to wait until they file their 2020 tax returns in 2021 to receive their payments.   Late notices. During 2020, taxpayers were sent more than 20 million notices bearing dates that had passed and, in many cases, response or payment deadlines that also had passed. This happened because on two occasions during the year, IRS computers automatically generated notices that the IRS did not have the capacity to mail at the time. Rather than reprint the notices with new dates, the IRS decided to include "inserts" with about 1.8 million notices explaining that taxpayers would have additional time to respond. But the IRS failed to include these inserts with other notices that should have contained them and had to issue supplemental letters informing taxpayers of additional extensions. For affected taxpayers, this caused confusion and, in some cases, undue stress and concern. Among the late notices were collection notices and math error notices, where the failure to timely respond could mean loss of rights.   Lack of information about backlogs, notices, and other problems. The report says the IRS should have done a better job of keeping the public informed about COVID-19-related delays by creating a regularly updated "COVID-19 Dashboard" and issuing weekly news releases to ensure the information was widely disseminated. While the IRS did post limited information on IRS.gov during the latter part of the year, it was not well-promoted and it was not regularly updated. As mentioned above, for example, the IRS website on December 31 contained an update posted on Dec. 1 that stated the numbers of unprocessed individual and business returns as of November 24 were 7.1 million and 2.3 million, respectively, and that some unprocessed returns dated back to April 15. The report says the public will benefit if the IRS begins to update its backlog information weekly, and the IRS and TAS consequently will receive fewer calls from taxpayers reaching out solely to obtain that information. Inadequate funding is the source of many (not all) taxpayer problems By statute, the National Taxpayer Advocate is required to identify the ten most serious problems encountered by taxpayers in their dealings with the IRS. In her preface to the report, Collins wrote: "If this year's Most Serious Problems are read in combination, one overriding theme emerges: To improve taxpayer service, the IRS needs more resources to hire employees and more resources to modernize its information technology (IT) systems." Among the Most Serious Problems are the following: Insufficient employee hiring and retention. Since FY 2010, the IRS workforce has shrunk by approximately 20%, about even with the inflation-adjusted reduction in the IRS budget. Inadequate funding combined with weaknesses in hiring and retention strategies have created an insufficient and disproportionately aging workforce, with an estimated 26% of IRS employees eligible to retire during FY 2021. The report says insufficient experienced staffing in the IRS's Human Capital Office and hiring restrictions outside its control have left the IRS ill-equipped to handle the agency's hiring needs. TAS recommends the IRS hire additional human resource specialists to meet hiring needs, restructure internal hiring processes to reduce cycle times, and renegotiate the hiring process with the National Treasury Employees Union to allow for up to 50% of all hiring announcements to be filled externally.   Inadequate telephone and in-person taxpayer service. In FY 2020, the IRS received more than 100 million calls on its toll-free telephone lines. IRS employees answered only about 24 million. Taxpayers who got through waited an average of 18 minutes on hold. In recent years, the IRS has been serving fewer taxpayers in its Taxpayer Assistance Centers (TACs), and the COVID-19 pandemic exacerbated that trend. The number of taxpayers the IRS has served face-to-face has declined from 4.4 million five years ago in FY 2016, to 2.3 million in FY 2019, to 1.0 million in FY 2020. To improve telephone and TAC services, TAS recommends that the IRS prioritize the expansion of "customer callback" technology and give taxpayers the option of receiving face-to-face service through videoconferencing.   Limited functionality of online taxpayer accounts. The report says online taxpayer accounts are plagued by limited functionality. For example, taxpayers generally cannot view images of past tax returns, most IRS notices, or proposed assessments; file documents; or update their addresses or the names of authorized representatives. The inability to conduct transactions online is frustrating for taxpayers who have been conducting comparable transactions with financial institutions for more than two decades and increases the number of telephone calls and pieces of correspondence the IRS receives. TAS recommends the IRS expedite the expansion of online taxpayer accounts.   Antiquated information technology. The IRS continues to operate the two oldest major IT systems still in use in the federal government, dating to the early 1960s. The IRS also operates about 60 case management systems that generally are not interoperable. The report says obsolete systems limit the functionality of taxpayer accounts, prevent taxpayers from obtaining full details about the status of their cases, and impede the IRS's ability to select the best cases for compliance actions. Other Most Serious Problems include inadequate digital communication options; limitations on the ability of some taxpayers to e-file their tax returns; challenges in the correspondence examination process; inappropriate imposition of foreign information reporting penalties; delays in the processing of amended tax returns; and refund delays attributable to refund fraud filters. The report says a common link among these taxpayer problems is inadequate funding to allow the IRS to administer the tax system as well as it could. "The IRS is the accounts receivable department of the federal government," Collins wrote. "In FY 2020, it collected about $3.5 trillion on a budget of about $11.51 billion, producing a remarkable return on investment of more than 300:1. For this reason, it is economically irrational to underfund the IRS." The report says the IRS needs more funding to hire enough customer service representatives to answer taxpayer telephone calls and significant additional funding to modernize its IT systems. The IRS has developed a roadmap known as the "Integrated Modernization Business Plan" that would replace legacy systems with modern technology systems and enable the agency to provide improved service to taxpayers and deliver long-term budget efficiencies. The IRS has estimated it will require between $2.3 billion and $2.7 billion in additional funding over the next six years to implement this plan. Yet in FY 2020, the Business Systems Modernization account was funded at only $180 million. The funding level has been raised to $223 million in FY 2021, but the report calls that amount "a drop in the bucket compared to the IRS's IT funding needs." The report points out that the IRS recently developed comprehensive multi-year plans to improve taxpayer services and modernize its IT systems, as required by the Taxpayer First Act. Included in the plans are initiatives TAS has been proposing for several years, "including customer callback, robust online accounts, a focus on resolving taxpayer issues at the earliest possible time, and the use of digital tools to improve service." Collins wrote that the plans, if implemented, "will be a game-changer for taxpayers," but noted they are dependent on funding. National Taxpayer Advocate "Purple Book" of legislative recommendations The National Taxpayer Advocate's 2021 Purple Book proposes 66 legislative recommendations for consideration by Congress. Among them are the following: Authorize the IRS to establish minimum standards for tax return preparers. Most taxpayers hire tax return preparers to complete their returns, and visits to preparers by Government Accountability Office and Treasury Inspector General for Tax Administration auditors posing as taxpayers, as well as IRS compliance studies, have found preparers make significant errors that both harm taxpayers and reduce tax compliance. Nearly ten years ago, the IRS sought to implement minimum preparer standards, including requiring otherwise non-credentialed preparers to pass a basic competency test, but a federal court concluded the IRS could not do so without statutory authorization. TAS recommends Congress provide that authorization.   Expand the U.S. Tax Court's jurisdiction to hear refund cases. Under current law, taxpayers who owe tax and wish to litigate a dispute with the IRS must go to the U.S. Tax Court, while taxpayers who have paid their tax and are seeking a refund must file suit in a U.S. district court or the U.S. Court of Federal Claims. TAS recommends that all taxpayers be given the option to litigate their tax disputes in the U.S. Tax Court.   Restructure the Earned Income Tax Credit (EITC) to make it simpler for taxpayers and reduce improper payments. TAS has long advocated for dividing the EITC into two separate credits: (i) a refundable worker credit based on each individual worker's earned income, irrespective of the presence of a qualifying child, and (ii) a refundable child credit that would reflect the costs of caring for one or more children. For wage earners, claims for the worker credit could be verified with nearly 100% accuracy by matching income information on tax returns against income information on Forms W‑2, thereby reducing the improper payments rate on those claims to nearly zero. The portion of the EITC that varies based on family size would be combined with the child tax credit into a single family credit.   Increase the annual award cap for Low Income Taxpayer Clinics (LITCs). When the LITC matching grant program was established as part of the IRS Restructuring and Reform Act of 1998, Internal Revenue Code (IRC) § 7526 limited annual grants to no more than $100,000 per clinic. The cap was not indexed for inflation, and as a result, the per-clinic grant maximum is worth much less today. In light of the significant value LITCs provide, TAS recommends that Congress increase the per-clinic cap to $150,000 and index it to rise with inflation.   Require taxpayer consent before allowing IRS Counsel or Compliance personnel to participate in IRS Independent Office of Appeals conferences. Historically, the IRS's Counsel and Compliance functions provided input into Appeals conferences via taxpayer case files and, if a case was particularly large or complex, at a pre-conference. However, they generally did not attend Appeals conferences with taxpayers. In October 2016, Appeals revised its rules to allow Appeals Officers to include personnel from Counsel and Compliance in taxpayer conferences as a matter of routine. The report says this change undermines Congress's intent to "reassure taxpayers of the independence" of Appeals. TAS recommends that Congress require Appeals to obtain advance taxpayer consent before including Counsel or Compliance personnel in any conference between Appeals and a taxpayer.   Clarify that taxpayers may raise innocent spouse relief as a defense in collection proceedings and bankruptcy cases. Congress has enacted rules to relieve "innocent spouses" from joint and several liability in certain circumstances. If the IRS denies a taxpayer's request for innocent spouse relief, the taxpayer generally may seek review of the adverse determination in the Tax Court. However, the Tax Court does not have jurisdiction over collection suits arising under IRC §§ 7402 or 7403, or over bankruptcy proceedings arising under Title 11 of the U.S. Code. Courts have reached inconsistent decisions about whether taxpayers may raise innocent spouse relief as a defense in those categories of cases, undermining the innocent spouse protections and potentially resulting in differing treatment of similarly situated taxpayers. TAS recommends Congress clarify that taxpayers may raise innocent spouse claims in all such proceedings.   Clarify that the National Taxpayer Advocate may hire independent legal counsel. IRC § 7803(c) requires the National Taxpayer Advocate to operate independently of the IRS in key respects. To help ensure this independence, the conference committee report accompanying the IRS Restructuring and Reform Act of 1998 stated: "The conferees intend that the National Taxpayer Advocate be able to hire and consult counsel as appropriate." This is similar to the statutory authority Congress has granted inspectors general to ensure their independence. Until 2015, the National Taxpayer Advocate was able to hire attorneys to advise her, advocate for taxpayers, and write key sections of her two statutorily mandated reports to Congress. But the Treasury Department at that time began to enforce a policy that requires all attorney-advisors in the Department to report to the General Counsel absent a statutory exception. To enable the National Taxpayer Advocate to continue to advocate for taxpayers effectively and independently, TAS recommends that Congress authorize the Advocate to hire attorney-advisors that report directly to her. Other issues The report also contains a final assessment of the extended 2020 filing season, a taxpayer rights assessment that presents performance measures and other relevant data, a summary of key TAS systemic advocacy accomplishments, a discussion of the ten federal tax issues most frequently litigated during the preceding year, and a description of TAS's case advocacy operations during FY 2020. It also includes a research study that finds the IRS Collection function can and should implement an algorithm to identify taxpayers at high risk of economic hardship and spare them from entering into installment agreements they cannot afford. Please visit the Annual report to Congress for more information. In addition, TAS has recently released an Online Digital Roadmap Tool that will assist taxpayers with navigating the complexity of the tax system. By entering a notice or letter number, taxpayers can determine where they are on the roadmap, why they received the notice or letter, what rights they have, what they must do next, and where they can get additional help. Related items: Complete Report: 2020 Annual Report to Congress   Executive Summary Purple Book About the Taxpayer Advocate Service TAS is an independent organization within the IRS that helps taxpayers and protects taxpayer rights. Your local advocate's number is available in your local directory and at How to contact TAS. You may also call TAS toll-free at 877-777-4778. TAS can help if you need assistance resolving an IRS problem, if your problem is causing financial difficulty, or if you believe an IRS system or procedure isn't working as it should. And our service is free. For more information about TAS and your rights under the Taxpayer Bill of Rights, go to Taxpayer Advocate Service. You can get updates on tax topics at facebook.com/YourVoiceAtIRS, Twitter.com/YourVoiceatIRS, and YouTube.com/TASNTA.

https://www.irs.gov/newsroom/irs-ready-for-the-upcoming-tax-season-last-minute-changes-to-tax-laws-included-in-irs-forms-and-instructions

IR-2021-10, January 12, 2021 WASHINGTON — The Internal Revenue Service today assured taxpayers and tax professionals that updates to key federal tax forms and instructions are complete and will be available when Americans begin filing their tax returns. Most individual taxpayers file IRS Form 1040 or Form 1040-SRPDF once they receive Forms W-2 and other earnings information from their employers and payers. IRS has incorporated recent changes to the tax laws into the forms and instructions, and shared the updates with its partners who develop the software used by individuals and tax professionals to prepare and file their returns. Forms 1040 and 1040-SR and the associated instructions are available now on IRS.gov and are being printed for taxpayers who need a hard copy. Economic Impact Payments are an advance payment of the Recovery Rebate Credit. Important updates include the Recovery Rebate Credit worksheet on page 59 of the 1040/1040-SR instructions. Anyone who didn’t receive the full amount of both Economic Impact Payments should include the amounts they received, before any offsets, when they file. Anyone who received the full amount for both Economic Impact Payments should not include any information about the advance payments when they file their tax return. Also new this year is the option to use prior year income amounts when computing the Earned Income Tax Credit and the Additional Child Tax Credit.  The IRS has not yet announced a start date for the 2021 filing season. IRS Free File will open in mid-January when participating providers begin accepting returns. The IRS Free File providers will accept completed tax returns and hold them until they can be filed electronically with the IRS. Latest Economic Impact Payments are automatic for eligible taxpayers This month, the Treasury Department and the IRS are sending the second round of Economic Impact Payments to millions of Americans as part of the implementation of the Coronavirus Response and Relief Supplemental Appropriations Act. Taxpayers don’t need to take any action to receive these payments. Economic Impact Payments are automatic for eligible taxpayers who filed a 2019 tax return and those who receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits, Supplemental Security Income (SSI) and Veterans Affairs beneficiaries who didn’t file a tax return. These second round of payments follow the successful delivery of more than $270 billion in CARES Act Economic Impact Payments to about 160 million Americans in 2020. Eligible individuals who did not receive an Economic Impact Payment – either the first or the second payment – can claim a Recovery Rebate Credit when they file their 2020 taxes this year. The IRS urges taxpayers who didn’t receive an advance payment to review the eligibility criteria when they file their 2020 taxes; many people, including recent college graduates, may be eligible for a credit. Eligible individuals who didn’t receive the full amount of both Economic Impact Payments should claim the missing amount as a credit. Anyone who did receive the full amount for both Economic Impact Payments should not include any information about their payment when they file their taxes – they’ve already received the full amount of the Recovery Rebate Credit as advance payments. For the latest IRS forms and instructions, visit the IRS website at IRS.gov/forms. Please visit IRS.gov for the latest information about the Economic Impact Payments and filing your 2020 tax return.

https://www.irs.gov/newsroom/all-taxpayers-now-eligible-for-identity-protection-pins

IR-2021-09, January 12, 2021 IRS YouTube Video: Get an Identity Protection PIN - English | Spanish WASHINGTON — The Internal Revenue Service today expanded the Identity Protection PIN Opt-In Program to all taxpayers who can verify their identities. The Identity Protection PIN (IP PIN) is a six-digit code known only to the taxpayer and to the IRS. It helps prevent identity thieves from filing fraudulent tax returns using a taxpayers' personally identifiable information. "This is a way to, in essence, lock your tax account, and the IP PIN serves as the key to opening that account," said IRS Commissioner Chuck Rettig. "Electronic returns that do not contain the correct IP PIN will be rejected, and paper returns will go through additional scrutiny for fraud." The IRS launched the IP PIN program nearly a decade ago to protect confirmed identity theft victims from ongoing tax-related fraud. In recent years, the IRS expanded the program to specific states where taxpayers could voluntarily opt into the IP PIN program. Now, the voluntary program is going nationwide. About the IP PIN Opt-In Program Here are a few key things to know about the IP PIN Opt-In program: This is a voluntary program. You must pass a rigorous identity verification process. Spouses and dependents are eligible for an IP PIN if they can verify their identities. An IP PIN is valid for a calendar year. You must obtain a new IP PIN each filing season. The online IP PIN tool is offline between November and mid-January each year. Correct IP PINs must be entered on electronic and paper tax returns to avoid rejections and delays. Never share your IP PIN with anyone but your trusted tax provider. The IRS will never call, text or email requesting your IP PIN. Beware of scams to steal your IP PIN. There currently is no opt-out option but the IRS is working on one for 2022. How to get an IP PIN Taxpayers who want an IP PIN for 2021 should go to  IRS.gov/IPPIN  and use the Get an IP PIN tool. This online process will require taxpayers to verify their identities using the Secure Access authentication process if they do not already have an IRS account. See IRS.gov/SecureAccess for what information you need to be successful. There is no need to file a Form 14039, an Identity Theft Affidavit, to opt into the program Once taxpayers have authenticated their identities, their 2021 IP PIN immediately will be revealed to them. Once in the program, this PIN must be used when prompted by electronic tax returns or entered by hand near the signature line on paper tax returns. All taxpayers are encouraged to first use the online IP PIN tool to obtain their IP PIN. Taxpayers who cannot verify their identities online do have options. Taxpayers whose adjusted gross income is $72,000 or less may complete Form 15227PDF, Application for an Identity Protection Personal Identification Number, and mail or fax to the IRS. An IRS customer service representative will contact the taxpayer and verify their identities by phone. Taxpayers should have their prior year tax return at hand for the verification process. Taxpayers who verify their identities through this process will have an IP PIN mailed to them the following tax year. This is for security reasons. Once in the program, the IP PIN will be mailed to these taxpayers each year. Taxpayers who cannot verify their identities online or by phone and who are ineligible for file Form 15227 can contact the IRS and make an appointment at a Taxpayer Assistance Center to verify their identities in person. Taxpayers should bring two forms of identification, including one government-issued picture identification. Taxpayers who verify their identities through the in-person process will have an IP PIN mailed to them within three weeks. Once in the program, the IP PIN will be mailed to these taxpayers each year. No change for confirmed identity theft victims Taxpayers who are confirmed identity theft victims or who have filed an identity theft affidavit because of suspected stolen identity refund fraud will automatically receive an IP PIN via mail once their cases are resolved. Current tax-related identity theft victims who have been receiving IP PINs via mail will experience no change. See IRS.gov/IPPIN for additional details. The IRS also encourages tax professionals and employers to share information with taxpayers about the availability of the IP PIN. Tax professionals and employers can print or email Publication 5367PDF or share IRS social media/e-poster products. More Information Publication 5477, All taxpayers now eligible for Identity Protection PINsPDF Publication 5477 (SP), All taxpayers now eligible for Identity Protection PINs (Spanish Version)PDF  

https://www.irs.gov/newsroom/irs-seeks-applications-for-the-electronic-tax-administration-advisory-committee-through-march-1

IR-2021-08, January 11, 2021 WASHINGTON — The Internal Revenue Service is seeking qualified applicants for nomination to the Electronic Tax Administration Advisory Committee (ETAAC). The ETAAC provides an organized public forum for discussion of electronic tax administration issues − such as prevention of identity theft and refund fraud − in support of the overriding goal that paperless filing should be the preferred and most convenient method of filing tax and information returns. ETAAC members work closely with the Security Summit, a joint effort of the IRS, state tax administrators and tax industry to fight electronic fraud. The IRS is looking for qualified individuals who will serve three-year terms beginning in September 2021. Applicants should have experience in such areas as state tax administration, cybersecurity and information security, tax software development, tax preparation, payroll and tax financial product processing, systems management and improvement and implementation of customer service initiatives. The IRS also encourages representatives from consumer groups with an interest in tax issues to apply. Applications will be accepted through March 1, 2021. Nominations of qualified individuals may be made by letter and received from organizations or the individuals themselves. Applicants should complete the ETAAC application PDFand include a short statement of interest and a resume. Applicants should describe and document their qualifications, past and current affiliations, and involvement with cybersecurity and electronic tax administration. In addition, applicants must successfully complete a tax compliance check, practitioner background check and FBI criminal background check. ETAAC is a Federal Advisory Committee established by the Internal Revenue Service Restructuring and Reform Act of 1998. Questions about the ETAAC and the application process can be e-mailed to publicliaison@irs.gov.

https://www.irs.gov/newsroom/irs-sends-taxpayer-first-act-report-to-congress

Recommendations aimed at providing greater ease, convenience to taxpayers and the tax community IR-2021-07, January 11, 2021 WASHINGTON — The IRS today sent the Taxpayer First Act ReportPDF to Congress, a comprehensive set of recommendations that will reimagine the taxpayer experience, enhance employee training and restructure the organization to increase collaboration and innovation. The IRS will continue conversations with key stakeholders and congressional committees to secure funding and begin to work toward implementation of these recommendations over the next several years. "The way we interact with taxpayers and the tax community, the way that we train our employees and the way we structure our organizational structure are important foundations for our future success," said IRS Commissioner Chuck Rettig. "Guided by the law, we will fundamentally change the way we operate, building upon our strengths, with additional focus on areas to improve the important service we provide to our great country." The Taxpayer First Act, signed into law in July 2019, was designed to improve taxpayer service and ensure the IRS continues to enforce the tax law in a fair and impartial manner. The report to Congress includes three integrated sets of recommendations required by the law, including: A taxpayer experience strategy that focuses on creating a proactive, convenient, seamless, personalized and effective interaction with taxpayers and the tax professional community; A comprehensive training strategy, a multi-faceted approach to empowering the workforce and equipping them with the skills and tools they need to advance their careers, provide high-quality service to taxpayers and enhance the taxpayer experience, and A recommended organizational design that will increase collaboration, coordinate strategic implementation of large-scale initiatives, enhance innovation, strengthen communications and prioritize taxpayer rights, all with the aim of improving the taxpayer experience. The IRS will begin work to implement several of the recommendations in the report as early as 2021, building upon work already underway to expand digital services, reach underserved communities and improve proactive outreach. "Over the next 10 years, taxpayers will find expanded options for information and services and an increasingly better experience across all of their interactions with the IRS," Rettig said. The report to CongressPDF is available on IRS.gov.

https://www.irs.gov/newsroom/treasury-issues-millions-of-second-economic-impact-payments-by-debit-card

Note: See IRS Statement — Update on Economic Impact Payments for additional information. Updated: January 8, 2021 IR-2021-06, January 7, 2021 WASHINGTON — Starting this week, the Treasury Department and the Internal Revenue Service are sending approximately 8 million second Economic Impact Payments (EIPs) by prepaid debit card. These EIP Cards follow the millions of payments already made by direct deposit and the ongoing mailing of paper checks that are delivering the second round of Economic Impact Payments as rapidly as possible. If Get My Payment on IRS.gov shows a date that your payment was mailed, watch your mail for either a paper check or debit card. To speed delivery of the payments to reach as many people as soon as possible the Treasury's Bureau of Fiscal Service is sending payments out by prepaid debit card. IRS and Treasury urge eligible people who don't receive a direct deposit to watch their mail carefully during this period. The prepaid debit card, called the Economic Impact Payment card, is sponsored by the Bureau of the Fiscal Service and is issued by Treasury's financial agent, MetaBank®, N.A. The IRS does not determine who receives a prepaid debit card. Taxpayers should note that the form of payment for the second mailed EIP may be different than the first mailed EIP. Some people who received a paper check last time might receive a prepaid debit card this time, and some people who received a prepaid debit card last time may receive a paper check. More information about these cards is available at EIPcard.com. EIP Cards are safe, convenient and secure. EIP Card recipients can make purchases online or in stores anywhere Visa® Debit Cards are accepted. They can get cash from domestic in-network ATMs, transfer funds to a personal bank account and obtain a replacement EIP Card if needed without incurring any fees. They can also check their card balance online, through a mobile app or by phone without incurring fees. The EIP Card provides consumer protections including certain protections against fraud, loss and other errors. EIP Cards are being sent in a white envelope that prominently displays the U.S. Department of the Treasury seal. The EIP Card has the Visa name on the front of the Card and the issuing bank name, MetaBank®, N.A. on the back of the card. Each mailing will include instructions on how to securely activate and use the EIP Card.   EIP Cards are being issued to eligible recipients across all 50 states and the District of Columbia. Residents of the western part of the United States are generally more likely to receive an EIP Card. The swift issuance of this second round of payments follows the successful delivery of more than $270 billion in CARES Act Economic Impact Payments earlier this year. To check the status of a payment, visit IRS.gov/getmypayment. For more information about Economic Impact Payments visit IRS.gov/eip.

https://www.irs.gov/newsroom/treasury-irs-provide-final-regulations-to-help-businesses-claim-credits-for-carbon-capture

IR-2021-05, January 6, 2021 WASHINGTON – Today the Treasury Department and Internal Revenue Service issued final regulationsPDF regarding the credit for qualified carbon oxide captured using carbon capture equipment placed in service on or after February 9, 2018. The final regulations help businesses understand how the credit for qualified carbon oxide sequestration may benefit those claiming two carbon capture credit amounts, which are: Up to $50 per metric ton of qualified carbon oxide for permanent sequestration; and Up to $35 per metric ton of qualified carbon oxide for Enhanced Oil or Natural Gas Recovery purposes.  Neither of these new credit amounts, contained in the Bipartisan Budget Act of 2018, is subject to a limitation on the number of metric tons of qualified carbon oxide captured. The law also expanded carbon capture to include "qualified carbon oxide," a broader term than "qualified carbon dioxide." Prior to the change in law, carbon capture was limited to a total of 75,000,000 metric tons of qualified carbon dioxide. These final regulations provide rules to determine: Adequate security measures for the geological storage of qualified carbon oxide; Exceptions to the general rule for determining to whom the credit is attributable; Procedures for a taxpayer to make an election to allow third-party taxpayers to claim the credit; The definition of carbon capture equipment; and Standards for measuring utilization of qualified carbon oxide. In addition, the final regulations allow smaller carbon capture facilities to be aggregated into one project for purposes of claiming the credit when certain factors are present, such as common ownership and location. The final regulations also provide guidance on recapture, including introducing a recapture period of three years. Under these rules, credits must be repaid if carbon oxide leaks into the atmosphere during a three-year period after the initial storage or injection. The Treasury Department and IRS received written and electronic comments responding to the proposed regulations. A public hearing on the proposed regulations was held on August 26, 2020. Copies of written comments and the list of speakers at the public hearing are available at Regulations.gov.

https://www.irs.gov/newsroom/eligible-paycheck-protection-program-expenses-now-deductible

IR-2021-04, January 6, 2021 WASHINGTON — The Treasury Department and the Internal Revenue Service issued guidancePDF today allowing deductions for the payments of eligible expenses when such payments would result (or be expected to result) in the forgiveness of a loan (covered loan) under the Paycheck Protection Program (PPP). Today's guidance, Revenue Ruling 2021-02PDF, reflects changes to law contained in the COVID-related Tax Relief Act of 2020, enacted as part of the Consolidated Appropriations Act, 2021 (Act), Public Law 116-260, which was signed into law on December 27, 2020. The COVID-related Tax Relief Act of 2020 amended the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to say that no deduction is denied, no tax attribute is reduced, and no basis increase is denied by reason of the exclusion from gross income of the forgiveness of an eligible recipient's covered loan. This change applies for taxable years ending after March 27, 2020. Revenue Ruling 2021-02 obsoletes Notice 2020-32 and Revenue Ruling 2020-27. This obsoleted guidance disallowed deductions for the payment of eligible expenses when the payments resulted (or could be expected to result) in forgiveness of a covered loan. For more information about this, the COVID-related Tax Relief Act of 2020, and other tax changes, visit IRS.gov.

https://www.irs.gov/newsroom/irs-releases-2020-progress-update-annual-report-details-unprecedented-year

IR-2021-03, January 5, 2021 WASHINGTON — The Internal Revenue Service today released its 2020 annual report describing the agency's work delivering taxpayer service and compliance efforts during COVID-19 while spotlighting actions taken by IRS employees to help people during the challenging year. "Internal Revenue Service Progress Update/Fiscal Year 2020 – Putting Taxpayers FirstPDF" outlines how the agency overcame difficulties during the pandemic to deliver Economic Impact Payments in record time. At the same time, IRS employees made adjustments to complete a successful filing season despite office closures and the latest tax deadline ever. "The COVID-19 pandemic presented some of the greatest challenges to the IRS in its history, both in terms of being able to carry out our mission and in protecting the health and safety of taxpayers and our own workforce," IRS Commissioner Chuck Rettig wrote in the report's opening message and addressed in his A Closer Look column. "IRS employees responded admirably by quickly facilitating financial assistance to millions of deserving and needy Americans." The 44-page report also highlights accomplishments around the agency's six strategic goals and identifies ongoing modernization efforts. This year's edition also discusses work related to implementing the Taxpayer First Act. "Even with all the challenges, we believe we have made great strides during Fiscal Year 2020, but we want to do more," Rettig said. Rettig explained that each year the IRS collects more than $3 trillion in taxes and generates approximately 96% of the funding that supports the federal government's operations. "My experiences as Commissioner have strengthened my belief that a fully functioning IRS is critical to the success of our nation," he said. "When citizens can perform their civic duty each year by preparing and filing their taxes and paying only what they should, they help fund critical aspects of the United States ranging from schools and roads to Social Security payments and the nation's military." The document lays out numerous examples of how IRS employees helped taxpayers, including: Expanded information and assistance available to taxpayers in additional languages and underserved communities to help deliver Economic Impact Payments and other services.   Adjusted agency processes through the People First Initiative to help people and businesses encountering payment and other challenges during the pandemic.   Offered an electronic filing option for amended tax returns with the new Form 1040-X, marking a major milestone to help taxpayers and the tax community.   Served their communities outside official duties through charitable donations and service projects. The report also illustrates ways IRS employees worked to maintain the tax system through a strong, visible and robust tax enforcement presence. The IRS enhanced its criminal investigation and civil enforcement efforts with an expanded use of data analytics and artificial intelligence across all lanes from selection to examination. The new Progress Update also highlights IRS work partnering on landmark criminal investigative cases that brought down child pornography, drug and terrorist organizations. The agency continued to step up its pursuit of those who promote and make use of abusive tax shelters, including syndicated conservation easements, where it saw successful Tax Court litigation and the completion of the first settlement initiative. The report also explains the IRS' Integrated Business Modernization Plan, the roadmap guiding agency efforts to offer best-in-class service people are accustomed to receiving from an online retailer or financial institution. "As we move into the future, the name of the game for the IRS will continue to be innovation, creativity and service to the people of our country to make their world better," Rettig said. "Given all we've accomplished together in 2020 and all we're working to achieve, we believe the future looks bright for the IRS, the tax system and our nation." The resource document complements other documents, including the annual IRS Data Book.

https://www.irs.gov/newsroom/irs-revises-form-1024-a-application-for-section-501c4-tax-exempt-status-as-part-of-ongoing-efforts-to-improve-service

IR-2021-02, January 5, 2021 WASHINGTON — As part of ongoing efforts to improve service for the tax-exempt community, the Internal Revenue Service issued the revised Form 1024-A, Application for Recognition of Exemption Under Section 501(c)(4), and its instructions to allow electronic filing. "Electronic filing will make the Form 1024-A application easier to complete while reducing errors," said Edward Killen, Acting Commissioner of the IRS Tax Exempt and Government Entities division. "Electronic filing also shortens IRS processing time so applicants won't wait as long for a response." Beginning January 5, 2021, IRS will make available the electronic version of the Form 1024-A that organizations seeking to be exempt under Section 501(c)(4) may use to submit online at Pay.gov. The IRS will provide a 90-day grace period during which it will continue to accept paper versions of Form 1024-A (Rev. 01-2018); however, after April 5 the Form 1024-A must be submitted electronically. The required user fee for Form 1024 will remain $600 for 2021. Applicants must pay the fee through Pay.gov when submitting the form. Payment can be made directly from a bank account or by credit or debit card. Subscribe to Exempt Organizations Update, a free IRS e-Newsletter, for form updates and other exempt organization news. Additional information on how to apply for IRS recognition of tax-exempt status: Applying for Tax-Exempt Status on IRS.gov Form 1024-A Electronic Filing Overview presentation on StayExempt.irs.gov Revenue Procedure 2021-08PDF

https://www.irs.gov/newsroom/economic-impact-payments-on-their-way-visit-irsgov-instead-of-calling

Note: See IRS Statement — Update on Economic Impact Payments for additional information. Updated: January 8, 2021 IR-2021-01, January 4, 2021 WASHINGTON — The Internal Revenue Service today urged people to visit IRS.gov for the most current information on the second round of Economic Impact Payments rather than calling the agency or their financial institutions or tax software providers. IRS phone assistors do not have additional information beyond what’s available on IRS.gov. The IRS and the Treasury Department began issuing a second round of Economic Impact Payments, often referred to as stimulus payments, last week.  The direct deposit payments may take several days to post to individual accounts. Some Americans may have seen the direct deposit payments as pending or as provisional payments in their accounts before the scheduled payment date of January 4, 2021, which is the official date funds are available. Paper checks also began going out and will continue to be sent through January. Some people will be mailed debit cards in January, and the IRS urges people to carefully check their mail. Mailed payments will require more processing and mailing time. Those who reside abroad will have longer wait times for checks as disruptions to air travel and mail delivery in some countries will slow delivery. The IRS emphasizes that there is no action required by eligible individuals to receive this second payment. The payments are automatic, and people should not contact their financial institutions, tax software providers or the IRS with payment timing questions. Eligibility Generally, U.S. citizens and resident aliens who are not eligible to be claimed as a dependent on someone else’s income tax return are eligible for this second payment. Eligible individuals will automatically receive an Economic Impact Payment of up to $600 for individuals or $1,200 for married couples and up to $600 for each qualifying child. Most people who have an adjusted gross income for 2019 of up to $75,000 for individuals and up to $150,000 for married couples filing joint returns and surviving spouses, will receive the full amount of the second payment. For filers with income above those amounts, the payment amount is reduced. Checking the status of a payment Starting today, people can check the status of both their first and second payments by using the Get My Payment tool, available in English and Spanish only on IRS.gov. Payment not received or less than expected? Claim on 2020 tax return Payments started going out last week and will continue through mid-January. Direct deposit payments are being made first to those that have valid routing and account information on file for direct deposit purposes. Because of the speed at which IRS issued this second round of payments, some payments may have been sent to an account that may be closed or no longer active. If the second Economic Impact Payment was sent to a temporary account that is closed or is no longer active, the IRS is currently working with our tax industry partners on options to potentially get these payments to individuals as quickly as possible. More information will be shared when available. While the IRS is exploring options to correct these payments, if you have not received your full payment by the time you file your 2020 tax return, you may claim the Recovery Rebate Credit on your tax return. The credit is figured like the Economic Impact Payment, except that the credit eligibility and the credit amount are based on the 2020 tax year information, including income. For people who received a partial Economic Impact Payment, they can take the Recovery Rebate Credit for any remaining amount they’re eligible for by completing line 30 of the 2020 Form 1040 or 1040-SR. Changing bank account or mailing information The IRS cannot change payment information, including bank account or mailing information. If an eligible taxpayer does not get a payment or it is less than expected, it may be claimed on the 2020 tax return as the Recovery Rebate Credit. Remember, Economic Impact Payments are an advance payment of what will be called the Recovery Rebate Credit on the 2020 Form 1040 or Form 1040-SR. More information For more information about Economic Impact Payments and the 2020 Recovery Rebate Credit, visit IRS.gov/eip. People can check the status of their payment at IRS.gov/getmypayment. For other COVID-19-related tax relief, visit IRS.gov/coronavirus.

https://www.irs.gov/newsroom/irs-reminds-businesses-to-report-large-cash-transactions-e-file-encouraged

IR-2021-47, February 26, 2021 WASHINGTON — The Internal Revenue Service today reminds businesses of their responsibility to file Form 8300, Report of Cash Payments Over $10,000, and encourages e-filing to help them file accurate, complete forms. Although many cash transactions are legitimate, information reported on Form 8300 can help stop those who evade taxes, profit from drug trading, engage in terrorist financing and conduct other criminal activities. The government can often trace money from these illegal activities through payments reported on complete, accurate forms. To help businesses prepare and file reports, the IRS created a video on How to Complete Form 8300 – Part I, Part II. The short video points out sections of Form 8300 for which the IRS commonly finds mistakes and explains how to accurately complete those sections. Also, the IRS encourages businesses to electronically file completed forms. Although they have the option of filing Form 8300 on paper, electronic filing is more accurate and reduces the need for follow-up correspondence with the IRS. Many businesses have already found the free and secure e-filing system is a more convenient and cost-effective way to meet the reporting deadline of 15 days after a transaction. They get free, automatic acknowledgment of receipt when they file. And, businesses can batch file their reports, which is especially helpful to those required to file many forms. To file Form 8300 electronically, a business must set up an account with the Financial Crimes Enforcement Network's BSA E-Filing System. For more information, interested businesses can call the Bank Secrecy Act E-Filing Help Desk at 866-346-9478 or email them at BSAEFilingHelp@fincen.gov. The help desk is available Monday through Friday from 8 a.m. to 6 p.m. Eastern time. For more information about the reporting requirement, see FS-2021-3 available on IRS.gov.

https://www.irs.gov/newsroom/tax-time-guide-select-a-tax-return-preparer-with-care

IR-2021-46, February 25, 2021 WASHINGTON – The Internal Revenue Service today reminded taxpayers to choose a tax return preparer with care. Even though the vast majority of tax return preparers provide honest, quality service, some cause great harm through fraud, identity theft and other scams every year. People value good tax return preparers for helping them through a complicated tax situation or for being available when they don't have time to prepare their own tax return. Paid tax return preparers completed more than half of the tax returns submitted to the IRS in tax-year 2018. It's very important to select the right tax professional. After all, people trust them with their most sensitive personal and financial information. No matter who prepares it, the accuracy of a tax return is ultimately the responsibility of the taxpayer. The IRS protects taxpayers by assessing significant civil penalties against dishonest return preparers and working with the Justice Department to end scams and prosecute the criminals behind them. What to look for The Choosing a Tax Professional page on IRS.gov has information about tax return preparer credentials and qualifications. The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help identify many preparers by type of credential or qualification. By law, anyone who is paid to prepare or assists in preparing most federal tax returns must have a valid Preparer Tax Identification Number, or PTIN. Paid preparers must sign and include their PTIN on the return. Not signing a return is a red flag that the paid preparer may be looking to make a quick profit by promising a big refund or charging fees based on the size of the refund. Well-intentioned taxpayers can be deceived by preparers who don't understand taxes or who mislead people into taking credits or deductions they aren't entitled to claim. Fraudulent preparers often do this to increase their fee. Here are more tips to consider: Look for a preparer who is available year-round. In the event questions come up about a tax return, taxpayers may need to contact the preparer after the filing season is over.   Inquire whether the tax return preparer has a professional credential (enrolled agent, certified public accountant or attorney), belongs to a professional organization or attends continuing education classes. Because tax law can be complex, competent tax return preparers remain up to date on tax topics. The IRS website has more information regarding national tax professional organizations.   Check the preparer's history. Check the Better Business Bureau website for information about the preparer. Look for disciplinary actions and the license status for credentialed preparers. For CPAs, check with the State Board of Accountancy. For attorneys, check with the State Bar Association. For Enrolled Agents, go to IRS.gov and search for "verify enrolled agent status" or check the Directory.   Ask about service fees. Avoid preparers who base fees on a percentage of their client's refund or boast bigger refunds than their competition. Don't give tax documents, Social Security numbers or other information to a preparer if merely inquiring about their services and fees. Unfortunately, some unscrupulous preparers have used this information to improperly file returns without the taxpayer's permission.   Provide records and receipts. Good preparers ask to see these documents. They'll also ask questions to determine the client's total income, deductions, tax credits and other items. Do not hire a preparer who e-files a tax return using a pay stub instead of a Form W-2. This is against IRS e-file rules.   Understand representation rules. Attorneys, CPAs and enrolled agents can represent any client before the IRS in any situation. Annual Filing Season Program participants may represent taxpayers in limited situations if they prepared and signed the tax return.   Never sign a blank or incomplete return.   Review the tax return before signing. Be sure to ask questions if something is not clear or appears inaccurate. Any refund should go directly to the taxpayer – not into the preparer's bank account. Reviewing the routing and bank account number on the completed return is always a good idea.   Report abusive tax preparers to the IRS. Use Form 14157, Complaint: Tax Return PreparerPDF. If a return preparer is suspected of filing or changing the return without the client's consent, also file Form 14157-A, Return Preparer Fraud or Misconduct AffidavitPDF. Forms are available on IRS.gov.   IRS.gov/chooseataxpro has additional information to help taxpayers including tips on choosing a preparer, the differences in credentials and qualifications, as well as how to submit a complaint regarding an unscrupulous tax return preparer. Start early; ask for phone or virtual help It is advisable to start searching for a tax return preparer as soon possible. This allows for more time to do research and get recommendations. Remember, taxpayers must pay any taxes due by April 15, even if an extension is necessary. Be sure to check with the tax return preparer to see if there are any restrictions or additions to the services they provide because of the COVID-19 pandemic. Some may offer phone or virtual assistance options in addition to their usual in-person services. Customers may be asked, for example, to mail documents to them or scan and e-mail documents through a secure internet connection. Taxpayers can find answers to questions, forms and instructions and easy-to-use tools online at IRS.gov. They can use these resources to get help when it's needed, at home, at work or on the go. This news release is part of a series called the Tax Time Guide, a resource to help taxpayers file an accurate tax return. Additional help is available in Publication 17, Your Federal Income Tax (For Individuals).

https://www.irs.gov/newsroom/irs-issues-alert-on-improper-corporate-domestic-production-activities-deduction-refund-claims

IR-2021-45, February 25, 2021 WASHINGTON — IRS officials issued an alert today concerning amended returns and claims for the Domestic Production Activities Deduction (DPAD). This provision of tax law was repealed as part of the Tax Cuts and Jobs Act for taxable years after December 31, 2017. In the wake of the repeal, the IRS has received a wave of questionable amended returns and claims for tax benefits in the billions of dollars. "We have no qualms with taxpayers claiming benefits allowed by law," said Doug O'Donnell, Commissioner, Large Business and International Division. "But a very high percentage of the claims for the now repealed Domestic Production Activities Deduction are not properly supported by those claiming it." A large majority of the filings involve taxpayers who are claiming DPAD for the first time based on studies conducted after the fact, which contain unreasonable assumptions of facts and law. In September of 2018, LB&I announced a campaign to risk assess claims or amended returns under the repealed section of the law. The IRS will continue to audit this issue even though the section was repealed. Examiners are auditing these claims with the support of Chief Counsel, engineer specialists, and the Corporate Income and Losses Practice Network. In July 2020, the IRS issued a General Legal Advice Memorandum (GLAM)PDF addressing examples of meritless section 199 online software activity. In many examination cases, once challenged, taxpayers have conceded 100% of the claim. And, the IRS continues to litigate section 199 issues. Examiners have been advised to consider Section 6676, Erroneous Claim for Refund or Credit, penalties, other applicable penalties, and referrals to the Office of Professional Responsibility (OPR), when appropriate. Taxpayers and their advisors should ensure they have documentation to support their position and should expect that the IRS may impose appropriate penalties unless taxpayers establish that they have reasonable cause. A study does not necessarily provide reasonable cause. "Meritless claims are harmful to tax administration and voluntary compliance. Any corporate taxpayer who is considering filing such a claim should reconsider. Taxpayers who have already filed can withdraw prior to IRS audit contact to avoid penalties," said O'Donnell.

https://www.irs.gov/newsroom/tax-time-guide-how-to-do-taxes-for-free-and-get-refunds-fast

IR-2021-44, February 23, 2021 IRS YouTube Videos: Free Help Preparing Your Tax Return - English | Spanish | ASL (obsolete) Do-It-Yourself Free Tax Preparation - English | Spanish Do Your Taxes for Free With Free File - English | Spanish | ASL WASHINGTON — During this tax season when many people are trying to stay safe at home, the Internal Revenue Service reminds taxpayers about ways to do their taxes for free online or with help from volunteers. Free File is easy, fast, safe and secure Taxpayers who want to prepare and file their tax returns electronically can use IRS Free File. IRS Free File offers brand-name tax software for taxpayers with an income of $72,000 or less in 2020. Taxpayers who earned more can use Free File Fillable Forms, the electronic version of IRS paper forms. Taxpayers can get started at IRS.gov/freefile. IRS Free File also lets taxpayers get an automatic extension of time to file if they need it. Free File is also a way to get a refund fast. Filing electronically and using direct deposit is the fastest and most accurate way to file and get a refund. The IRS issues nine out of 10 refunds in 21 days or less. Taxpayers filing on paper can also choose direct deposit, but paper returns take longer to process. Free File and e-file also help taxpayers who owe. When filing electronically, taxpayers can pay with electronic funds withdrawal for free. Another option is to pay with their bank account using Direct Pay. In addition to paying online, taxpayers who owe taxes can pay using the IRS2Go mobile app on a smartphone or other mobile device. Information about all payment options is available at IRS.gov/payments. Free options for the military and some veterans MilTax, Military OneSource's tax service, provides online software for eligible individuals to electronically file a federal return and up to three state returns for free. Military OneSource is a program funded by the Department of Defense that provides a range of free resources for military members, veterans and their families. More information about OneSource is available at MilitaryOneSource.mil. Get free tax help from volunteers in the community The Volunteer Income Tax Assistance (VITA) program offers free tax help to individuals who generally make $57,000 or less, persons with disabilities, the elderly and individuals with limited English proficiency who need assistance in preparing their taxes. The Tax Counseling for the Elderly (TCE) program also offers free tax help to taxpayers, particularly those age 60 and older. For over 50 years, volunteers have prepared tax returns in communities across the country. Each filing season, tens of thousands of dedicated VITA/TCE volunteers prepare millions of federal and state returns. Last year, for example, over 70,000 volunteers prepared over 2.5 million federal tax returns. And this tax season, due to the ongoing pandemic, some volunteer sites will offer virtual help to taxpayers in place of face-to-face assistance. This allows volunteers to help taxpayers over the phone or online to complete their returns. While virtual tax prep will be an option this tax season, some VITA/TCE sites will still offer in-person free tax help. However, safety and social distancing will be emphasized. IRS-certified VITA and TCE volunteers are trained to help taxpayers claim the tax credits they are entitled to such as the Earned Income Tax Credit and the Child Tax Credit and Credit for Other Dependents. The Earned Income Tax Credit (EITC) is a significant tax credit for workers who earned $56,844 or less in 2020. The IRS estimates four out of five eligible taxpayers claim and get the EITC. Nationwide in 2020, around 25 million taxpayers received over $62 billion in EITC. The average EITC amount received was $2,461 per return. The EITC is worth as much as $6,660 for a family with three or more children or up to $538 for taxpayers who do not have a qualifying child. New this tax season, taxpayers can use their 2019 earned income to figure their 2020 EITC and the Additional Child Tax Credit if their 2019 earned income was more than their 2020 earned income. To qualify for EITC, people must have earned income, so this option may help workers who earned less in 2020, or received unemployment income instead of their regular wages, get bigger tax credits and larger refunds in the coming year. Also, any Economic Impact Payments received are not taxable or counted as income for purposes of claiming the EITC. Eligible individuals who did not receive the full amounts of both Economic Impact Payments may claim the Recovery Rebate Credit on their 2020 tax return. See IRS.gov/rrc for more information. The VITA and TCE programs can help answer many EITC questions and help taxpayers claim the credit if they qualify. Taxpayers may also use the IRS.gov EITC Assistant to help them determine their eligibility. To find the nearest VITA or TCE site, taxpayers can use the VITA and TCE locator tool available on IRS.gov, download the IRS mobile app IRS2Go, or call 800-906-9887. Help in other languages – Chinese, Cantonese, Hindi, Korean, Mandarin, Russian, Spanish, Tagalog and Vietnamese – is also available at select locations across the country. The locator tool indicates where these services are offered. Please note that some VITA/TCE sites are not operating at full capacity this year and others are not opening. But the locator tool is updated throughout the tax season, so taxpayers can check back if they don't see a nearby site listed. Get more help Taxpayers can find answers to questions, forms and instructions and easy-to-use tools online at IRS.gov. No appointment required and no waiting on hold. This is part of a series called the Tax Time Guide, focused on helping people file a federal tax return accurately and efficiently. Additional help is available in Publication 17, Your Federal Income Tax.

https://www.irs.gov/newsroom/victims-of-texas-winter-storms-get-deadline-extensions-and-other-tax-relief

IR-2021-43, February 22, 2021 WASHINGTON — Victims of this month's winter storms in Texas will have until June 15, 2021, to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced today. Following the recent disaster declaration issued by the Federal Emergency Management Agency (FEMA), the IRS is providing this relief to the entire state of Texas. But taxpayers in other states impacted by these winter storms that receive similar FEMA disaster declarations will automatically receive the same filing and payment relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov. The tax relief postpones various tax filing and payment deadlines that occurred starting on February 11. As a result, affected individuals and businesses will have until June 15, 2021, to file returns and pay any taxes that were originally due during this period. This includes 2020 individual and business returns normally due on April 15, as well as various 2020 business returns due on March 15. Among other things, this also means that affected taxpayers will have until June 15 to make 2020 IRA contributions. The June 15 deadline also applies to quarterly estimated income tax payments due on April 15 and the quarterly payroll and excise tax returns normally due on April 30. It also applies to tax-exempt organizations, operating on a calendar-year basis, that have a 2020 return due on May 17. In addition, penalties on payroll and excise tax deposits due on or after February 11 and before February 26 will be abated as long as the deposits are made by February 26. The IRS disaster relief page has details on other returns, payments and tax-related actions qualifying for the additional time. The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated. In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization. Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2021 return normally filed next year), or the return for the prior year. This means that taxpayers can, if they choose, claim these losses on the 2020 return they are filling out this tax season. Be sure to write the FEMA declaration number – 4586 − on any return claiming a loss. See Publication 547 for details. The tax relief is part of a coordinated federal response to the damage caused by these storms and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov.

https://www.irs.gov/newsroom/irs-reminds-farmers-and-fishers-of-march-1-tax-deadline

IR-2021-42, February 19, 2021 WASHINGTON — The Internal Revenue Service is reminding those with income from a farming or fishing business that they can avoid making any estimated tax payments by filing and paying their entire tax due on or before March 1. This rule generally applies if farming or fishing income was at least two-thirds of the taxpayer's total gross income in either the current or the preceding tax year. Those who choose not to file by March 1 should have made an estimated tax payment by Jan. 15 to avoid an estimated tax penalty. For more information on estimated tax, refer to Publication 505, Tax Withholding and Estimated Tax. Those in the farming business report income and expenses on Schedule F (Form 1040), Profit or Loss From Farming. They also use Schedule SE (Form 1040), Self-Employment Tax to figure self-employment tax if their net earnings from farming are $400 or more. For more information refer to Topic No. 554, Publication 225, Farmer's Tax Guide and Agriculture Tax Center. Those in the fishing business report income and expenses on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship). They also use Schedule SE (Form 1040) to figure self-employment tax if their net earnings from fishing are $400 or more. For general information about the rules applying to individuals, including commercial fishermen who file Schedule C, refer to Publication 334, Tax Guide for Small Business. Those whose trade or business is a partnership or corporation see Publication 541, Partnerships or Publication 542, Corporations. IRS Direct Pay is safe, fast and free IRS Direct Pay is a free online service where people can make same day payments or schedule them up to 365 days in advance directly from a checking or savings account. There are no IRS fees and no pre-registration. IRS Direct Pay is available seven days a week, and users receive instant confirmation after they submit a payment or they can opt-in to receive email notifications. IRS Direct Pay cannot be used to pay the federal highway use tax, payroll taxes or other business taxes. Anyone wishing to pay these business taxes electronically can enroll in the Electronic Federal Tax Payment System (EFTPS). EFTPS is also a free service. For more information about these and other payment options visit IRS.gov/payments. Related items Tax Topic 416, Farming and Fishing Income Publication 5034 (EN-SP), Need to Make a Tax Payment?PDF (English and Spanish)

https://www.irs.gov/newsroom/low-income-taxpayer-clinics-represented-over-20000-taxpayers-dealing-with-an-irs-tax-controversy-see-the-latest-program-report-and-the-2021-litc-grant-recipient-list

IR-2021-41, February 19, 2021 WASHINGTON — The Internal Revenue Service's Low Income Taxpayer Clinic (LITC) Program office today announced highlights from its 2020 annual reportPDF, featuring successful taxpayer outreach to thousands of taxpayers. The report describes how LITCs provide representation, education and advocacy for taxpayers who are low income or speak English as a second language (ESL). The program also announced its 2021 LITC grant recipient list. The LITC Program is a federal grant program administered by the Taxpayer Advocate Service, led by National Taxpayer Advocate Erin M. Collins. LITCs represent individuals whose incomes are below a certain level, generally within 250% of the federal poverty guideline, and need to resolve tax problems with the IRS, such as audits, appeals and tax collection disputes. They can represent taxpayers in court as well as within the IRS. They also can provide information about taxpayer rights and responsibilities in different languages for ESL taxpayers. LITCs provide services for free or a small fee. They receive IRS grants but work independently to assist and advocate for taxpayers. "I applaud the Low Income Taxpayer Clinic Program for another successful year filling a crucial role in helping low-income taxpayers resolve their tax problems with the IRS," said National Taxpayer Advocate Erin M. Collins. "The services LITCs provide are critical, and I encourage organizations to consider applying for an LITC grant to open a clinic, especially in areas currently lacking an LITC." Thousands of taxpayers impacted During 2019, LITCs represented 20,259 taxpayers dealing with an IRS tax controversy. They helped taxpayers secure more than $6.8 million in tax refunds and reduced taxpayers' liabilities by more than $50 million. They also brought more than 4,100 taxpayers back into payment compliance. Through outreach and education activities, LITCs strived to ensure individuals understood their rights as U.S. taxpayers by conducting more than 1,800 educational activities that were attended by nearly 42,000 people. More than 1,500 volunteers contributed to the success of LITCs by contributing over 52,500 hours of their time. More than 65% of the volunteers were attorneys, certified public accountants, or enrolled agents. LITCs used a variety of approaches to successfully advocate for taxpayers. These included utilizing collection alternatives to resolve issues administratively within the IRS, litigating cases in the United States Tax Court and other federal courts, and elevating systemic issues through the Taxpayer Advocate Service's Systemic Advocacy Management System. One success story among many Here is one example of how an LITC assisted a taxpayer in need: A domestic violence shelter referred a recently divorced mother to an LITC for assistance with a large tax liability. The taxpayer explained that her ex-husband was a heroin addict who abused her for years. The taxpayer's divorce decree ordered her ex-husband to pay their large tax bill to the IRS, but the taxpayer was concerned he would not pay it. She explained that her ex-husband had hidden income from her and did not provide all his income documents when she prepared their joint tax returns. The IRS discovered the unreported income and adjusted their tax returns, resulting in a large tax liability. The LITC helped the taxpayer gather supporting documentation and prepared a Form 8857, Request for Innocent Spouse Relief. With the documentation gathered by the taxpayer, the LITC established that the tax liability resulted from the ex-husband's unreported income and that the taxpayer experiencing domestic violence didn't know, or have any reason to know, of the unreported income when she signed the joint tax returns. The IRS determined it would be unfair to hold this taxpayer liable and granted her full relief. The full reportPDF contains more extraordinary stories about the representation that LITCs provide and extensive details about the LITC Program. It also details the results that LITCs achieved on behalf of their clients. How to Locate an LITC Near You Through the LITC Program, the IRS awards matching grants of up to $100,000 per year to qualifying organizations. IRS Publication 4134, Low Income Taxpayer Clinic ListPDF provides a list of the 2021 LITC grant recipients by geographic area, including contact information and details about the languages, in addition to English, in which each LITC offers services. 

https://www.irs.gov/newsroom/new-law-provides-additional-flexibility-for-health-fsas-and-dependent-care-assistance-programs

Employers may allow participants to carry over unused amounts IR-2021-40, February 18, 2021 WASHINGTON — The Internal Revenue Service today provided greater flexibility, due to the pandemic, to employee benefit plans offering health flexible spending arrangements (FSAs) or dependent care assistance programs. Under the COVID-related Taxpayer Certainty and Disaster Tax Relief Act of 2020, these plans now have additional discretion in 2021 and 2022 to adjust their programs to help employees better meet the unanticipated consequences of the public health emergency. Notice 2021-15PDF responds to unanticipated changes in the availability of certain medical care and dependent care. As a result of COVID-19, participating employees are more likely to have unused health FSA amounts or dependent care assistance program amounts at the end of 2020 and 2021. Generally, under these plans, an employer allows its employees to set aside a certain amount of pre-tax wages to pay for medical care and dependent care expenses. Amounts spent by the employee are then reimbursed from their designated health FSAs or dependent care assistance programs. Notice 2021-15 provides flexibility for employers in the following areas related to health FSAs and dependent care assistance programs: Provides flexibility for the carryover of unused amounts from the 2020 and 2021 plan years; Provides flexibility to extend the permissible period for incurring claims for plan years ending in 2020 and 2021; Provides flexibility to adopt a special rule regarding post-termination reimbursements from health FSAs; Provides flexibility for a special claims period and carryover rule for dependent care assistance programs when a dependent "ages out" during the COVID-19 public health emergency; and Allows certain mid-year election changes for health FSAs and dependent care assistance programs for plan years ending in 2021. Prior guidance provided flexibility to employers with cafeteria plans through the end of calendar year 2020, during which employers could permit employees to apply unused health FSA amounts and dependent care assistance program amounts to pay for or reimburse medical care or dependent care expenses. The Taxpayer Certainty and Disaster Tax Relief Act of 2020, signed into law on December 27, 2020, provides similar flexibility for these arrangements in 2021 and 2022. Millions of employees have access to health FSAs and dependent care assistance programs, sponsored by employers under "cafeteria plans." The decision to adjust these employee benefit programs is at the discretion of the employer that sponsors the plan. The amounts properly spent are not subject to federal income tax. Typically, account funds that are not spent by the employee within the plan year, subject to limited grace periods or certain carryover amounts, are forfeited. In accordance with the Taxpayer Certainty and Disaster Tax Relief Act of 2020, Notice 2021-15 gives employers the option to amend their plans to provide greater flexibility for employees to elect and use these programs during the pandemic without risking the forfeiture of the amounts they have set aside. The IRS has more COVID-19-related information for plan participants, employers and others who administer plans at IRS.gov.

https://www.irs.gov/newsroom/twenty-four-new-members-join-the-2021-taxpayer-advocacy-panel

IR-2021-39, February 18, 2021 WASHINGTON — The Internal Revenue Service recommended, and the Department of the Treasury has approved, the selection of 24 new members to serve on the Taxpayer Advocacy Panel for 2021. The new TAP members will join returning members to round out the panel of 67 volunteers for 2021. The new members were selected from a pool of approximately 300 interested individuals who applied during an open recruitment period last spring and from alternate members who applied in prior years. National Taxpayer Advocate Erin Collins recently shared her appreciation for all TAP volunteers: "I am grateful for these citizens volunteering their time and talent to the Taxpayer Advocacy Panel. I am very proud of the accomplishments of the TAP last year, and I look forward to the TAP bringing its valuable taxpayer perspective in recommending changes to tax administration to achieve the quality service that taxpayers expect and deserve." The TAP is a federal advisory committee charged with listening to taxpayers, identifying issues, and making suggestions to improve IRS service and customer satisfaction. Oversight and program support for the TAP are provided by the Taxpayer Advocate Service, an independent organization within the IRS that helps resolve taxpayer account problems and makes administrative and legislative recommendations to mitigate systemic problems. Members of the TAP work on a variety of issues that impact taxpayers in the key areas where the IRS and the public interact the most. Members also serve as a conduit for bringing grassroots concerns raised by the taxpaying public to the attention of the IRS. TAP members are U.S. citizens who volunteer to serve a three-year appointment and are expected to devote 200 to 300 hours per year to panel activities. To the extent possible, TAP members are demographically and geographically diverse, providing balanced representation from all 50 states, the District of Columbia and Puerto Rico. In addition, there is one TAP member from abroad who represents the interests of taxpayers working, living, or doing business abroad or in a U.S. territory. The new TAP members by location: Name City State Tor Daley Anchorage AK April Smith Birmingham AL Kristin White Gilbert AZ Matthew Kinley Long Beach CA Tracey Maria Randall York Corona CA John Yoon Carlsbad CA Rene Tiongquico Washington DC DC Joanne Thurston Marietta GA Christine Scott Kapaa HI Daniel Mistick Hailey ID Jamila Akil Hazel Crest IL Pamela Memmer Princeton IN Jon Ramirez Wichita KS Daniel Leatham Shrewsbury MA Brandon Smith Bowie MD James Usseglio Hollis NH Eugene Lillie West Deptford NJ Richard Metzler Las Vegas NV Cynthia Mills Glenside PA Rita Green Memphis TN Philip George Saint George UT Lucinda Weigel Vienna VA Donna Patterson Bothell WA Charles Simineo Cheyenne WY Taxpayers can contact the TAP representative for their geographic area by calling 888-912-1227 (a toll-free call) or online at www.improveirs.org. Those interested in serving on the 2022-2024 panel may apply during TAP's next open recruitment period beginning in March 2021. Taxpayers can also send written correspondence to the TAP at the following address: Taxpayer Advocacy Panel TA:TAP, Room 1509 1111 Constitution Avenue, N.W. Washington, D.C. 20224

https://www.irs.gov/newsroom/as-required-by-law-all-first-and-second-economic-impact-payments-issued-eligible-people-can-claim-recovery-rebate-credit

IR-2021-38, February 16, 2021 WASHINGTON – The IRS announced today that, as required by law, all legally permitted first and second round of Economic Impact Payments have been issued and the IRS now turns its full attention to the 2021 filing season. Beginning in April 2020, the IRS and Treasury Department began delivering the first round of Economic Impact Payments within two weeks of the legislation. The IRS issued more than 160 million EIPs to taxpayers across the country totaling over $270 billion, while simultaneously managing an extended filing season. In addition, since Congress enacted the COVID-related Tax Relief Act of 2020, the IRS has delivered more than 147 million EIPs in the second-round totaling over $142 billion. The legislation required that the second round of payments be issued by January 15, 2021. While some second round Economic Impact Payments may still be in the mail, the IRS has issued all first and second Economic Impact Payments it is legally permitted to issue, based on information on file for eligible people. Get My Payment was last updated on January 29, 2021, to reflect the final payments and will not update again for first or second Economic Impact Payments. Most people who are eligible for the Recovery Rebate Credit have already received it, in advance, in these two rounds of Economic Impact Payments. If individuals didn't receive a payment – or if they didn't receive the full amounts – they may be eligible to claim the Recovery Rebate Credit and must file a 2020 tax return. Eligibility for and the amount of the Recovery Rebate Credit are based on 2020 tax year information while the Economic Impact Payments were based on 2019 tax year information. For the first Economic Impact Payment, a 2018 return may have been used if the 2019 was not filed or processed. Individuals will need to know the amounts of any Economic Impact Payments they received to claim the Recovery Rebate Credit. Those who don't have their Economic Impact Payment notices can view the amounts of their first and second Economic Impact Payments through their individual online account. For married filing joint individuals, each spouse will need to log into their own account. To avoid refund delays, the IRS urges people to file a complete and accurate tax return. Filing electronically allows tax software to figure credits and deductions, including the Recovery Rebate Credit. The Recovery Rebate Credit Worksheet on Form 1040 and Form 1040-SR instructions can also help. Anyone with income of $72,000 or less, including those who don't have a tax return filing requirement, can file their federal tax return electronically for free through the IRS Free File Program. The fastest way to get a tax refund is to file electronically and have it direct deposited - contactless and free - into the individual's financial account. Bank accounts, many prepaid debit cards and several mobile apps can be used for direct deposit when you provide a routing and account number. IRS.gov/filing has details about IRS Free File, Free File Fillable Forms, free VITA or TCE tax preparation sites in your community or finding a trusted tax professional. More information Recovery Rebate Credit Video (obsolete) Publication 5486, Claiming the Recovery Rebate Credit on a 2020 Tax ReturnPDF Recovery Rebate Credit Frequently Asked Questions IRS.gov/freefile Instructions for Form 1040 and 1040-SR Secure Access: How to Register for Certain Online Self-Help Tools

https://www.irs.gov/newsroom/register-now-for-free-feb-18-irs-webinar-on-how-to-choose-a-tax-professional

IR-2021-37, February 12, 2021 WASHINGTON — The Internal Revenue Service will hold a free webinar, "How to Choose a Tax Pro," on Thursday, February 18 at 2 p.m. Eastern time. Participants should register in advance for this hour-long event. The webinar will: Provide tips for choosing a tax preparer Explain the types of paid preparers Describe how to use the IRS Directory of Federal Tax Return Preparers Discuss how to avoid "ghost" tax return preparers Review how to make a complaint about a tax return preparer Explain the third-party authorization process There will also be a question and answer period where participants can pose questions to the IRS presenters. The event is open to anyone who is interested. The webinar will be offered with closed captioning for viewers who are deaf or hard of hearing. Questions before the webinar can be sent to: cl.sl.web.conference.team@irs.gov. More information on choosing a tax professional can be found at IRS.gov, including a directory of tax return preparers with credentials and select qualifications. Archived webinars are available at www.irsvideos.gov.

https://www.irs.gov/newsroom/get-ready-for-tax-season-using-irs-online-account

IR-2021-36, February 11, 2021 WASHINGTON — The Internal Revenue Service today reminded taxpayers they can securely access their IRS account information through their individual online account. The IRS regularly adds features to online account. For example, people can now check the amounts of their Economic Impact Payments (EIPs) to help them accurately calculate any Recovery Rebate Credit they may be eligible for on their 2020 tax return. The EIP amounts can be found on the Tax Records tab. Amounts will show as "Economic Impact Payment" for the first payment and "Additional Economic Impact Payment" for the second payment. For married filing joint individuals, each spouse will need to sign into their own account to retrieve their portion of the payments. For more information regarding the credit, see Recovery Rebate Credit. Additionally, taxpayers can view: The amount they owe, updated for the current calendar day Their balance details by year Their payment history and any scheduled or pending payments Key information from their most recent tax return Details about their payment plan, if they have one Digital copies of select notices or letters from the IRS (under the Message Center tab) They can also: Make a payment online See payment plan options and request a plan via Online Payment Agreement Access their tax records via Get Transcript Later in 2021, taxpayers will be able to digitally sign certain authorization forms, such as a power of attorney, initiated by their tax professional. Here's how to get started for new users: Select View Your Account at IRS.gov homepage Select the "Create or View Your Account" button Click "Create Account" Pass "Secure Access" authentication. This is a rigorous process to verify that the taxpayers are who they say they are. They must be able to authenticate their identity to continue. See IRS.gov/secureaccess for details. Create a profile. Once the initial authentication process is complete, returning users can use the same username and password to access other IRS online services such as Get Transcript and Get An Identity Protection PIN (IP PIN) (if applicable). All password-protected online IRS tools for taxpayers are protected by multi-factor authentication, offering extra security precautions.

https://www.irs.gov/newsroom/avoid-pandemic-paper-delays-use-e-file-with-direct-deposit-for-faster-refunds-as-irs-prepares-to-open-2020-filing-season

IR-2021-35, February 11, 2021 WASHINGTON – With filing season opening on February 12, the Internal Revenue Service urged taxpayers to take some simple steps to help ensure they file accurate tax returns and speed their tax refunds to avoid a variety of pandemic-related issues. Although every year the IRS encourages taxpayers to e-file their returns and use direct deposit to receive refunds, to those taxpayers who have previously not used e-file, the IRS emphasizes using it this year to avoid paper-related processing delays. Taxpayers can file electronically by using a tax professional, IRS Free File or other commercial tax preparation software. The IRS cautioned paper-filed tax returns and paper checks will take even longer this year due to a variety of reasons. Taxpayers have until Thursday, April 15, 2021, to file their 2020 tax return and pay any tax owed. The IRS expects to receive more than 160 million individual tax returns this year with nine out of 10 returns filed electronically. At least eight out of 10 taxpayers get their refunds by using direct deposit. "The pandemic has created a variety of tax law changes and has created some unique circumstances for this filing season," said IRS Commissioner Chuck Rettig. "To avoid issues, the IRS urges taxpayers to take some simple steps to help ensure they get their refund as quickly as possible, starting with filing electronically and using direct deposit. "Following months of hard work, we are ready to start this year's tax season," Rettig added. "Getting to this point is always a year-round effort for the IRS and the nation's tax community. Doing it in a continuing COVID-19 environment while simultaneously delivering stimulus payments for the nation is an unprecedented accomplishment by IRS employees. I also want to thank all our tax partners and tax professionals for their hard work that makes tax time smoother for the nation. All of us stand ready to serve America's taxpayers during this important filing season." Wage and Investment Commissioner and Chief Taxpayer Experience Officer Ken Corbin provides an in-depth perspective on how the IRS is preparing for a successful filing season in his A Closer Look column. Be tax ready: Review pandemic-related changes Last year's sweeping set of tax changes not only affected individuals and their families but may also affect the tax return they're filing this year. A new IRS fact sheet explains what taxpayers need to know to file a complete and accurate tax return. The IRS recognizes that filing this year may be challenging for some taxpayers and it's important to understand how to claim credits and deductions, get a refund timely and meet all tax responsibilities. Recovery Rebate Credit helps people still eligible for Economic Impact Payments For those who may be eligible for stimulus payments, they should carefully review the guidelines for the Recovery Rebate Credit. Most people received Economic Impact Payments automatically, and anyone who received the maximum amount does not need to include any information about their payments when they file. However, those who didn't receive a payment or only received a partial payment may be eligible to claim the Recovery Rebate Credit when they file their 2020 tax return. Tax preparation software, including IRS Free File, will help taxpayers figure the amount. New language preferences to help taxpayers Additionally, this year for the first time, Forms 1040 and 1040-SR are available in Spanish, and the IRS has a new form allowing taxpayers to request that they receive information from the IRS in their preferred language. The Schedule LEP, Request for Change in Language Preference, will allow taxpayers to request information in some 20 different languages besides English. The IRS also wants to remind taxpayers of other important changes that could impact their tax return this year. Remember to factor in retirement plan distributions Some taxpayers found it necessary to take coronavirus-related early distributions from 401(k) plans and traditional IRAs in 2020. Under the CARES Act, those distributions – up to $100,000 – are not subject to the 10% additional tax that otherwise generally applies to distributions made before an individual reaches age 59 ½. In addition, a coronavirus-related distribution can be included in income in equal installments over a three-year period, and an individual has three years to repay a coronavirus-related distribution to a plan or IRA and undo the tax consequences of the distribution. Taxpayers should also remember that they can make contributions to traditional IRAs until April 15, 2021, and still deduct that amount on their 2020 tax return, if eligible. New for 2020: non-itemizers can deduct $300 for charitable cash contributions Previously, charitable contributions could only be deducted if taxpayers itemized their deductions. However, with the CARES act, taxpayers who don't itemize deductions may take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying organizations. For the purposes of this deduction, qualifying organizations are those that are religious, charitable, educational, scientific or literary in purpose. Now more than ever, e-file is best Now more than ever, the safest and best way to file a complete and accurate tax return and get a refund is to file electronically and use direct deposit. Taxpayers can visit IRS.gov/filing for more details about IRS Free File, Free File Fillable Forms and Free tax preparation sites. E-filing is also available through a trusted tax professional. Free File is a great option for people who are only filing a tax return to claim the Recovery Rebate Credit, either because they didn't receive an Economic Impact Payment or did not receive the full amount. The fastest way to get a refund is to file electronically and use direct deposit. Most refunds are issued in less than 21 days, but some refunds may take longer for a variety of reasons. Taxpayers can track their refund using Where's My Refund? on IRS.gov or by downloading the IRS2Go mobile app where they'll get a personalized refund date as soon as 24 hours after the tax return is electronically submitted. Most early Earned Income Tax Credit/Additional Child Tax Credit filers should see an update to Where's My Refund? by February 22. The IRS cannot answer refund status inquiries unless it has been 21 days since the return was electronically filed. IRS tax help is available 24 hours a day on IRS.gov, where people can find answers to tax questions and resolve tax issues online from the safety of their home. The Let Us Help You page helps answer most tax questions, and the IRS Services GuidePDF links to other important IRS services.

https://www.irs.gov/newsroom/irs-summit-partners-issue-urgent-efin-scam-alert-to-tax-professionals

IR-2021-34, February 10, 2021 WASHINGTON — The Internal Revenue Service, state tax agencies and tax industry today warned tax professionals of a new scam email that impersonates the IRS and attempts to steal Electronic Filing Identification Numbers (EFINs). The Security Summit partners said the latest scheme, arriving just before the start of the nation's tax season, should serve as another reminder that tax professionals remain prime targets for identity thieves. These thieves try to steal client data and tax preparers' identities that will allow them to file fraudulent tax returns for refunds. "Phishing scams are the most common tool used by identity thieves to trick tax professionals into disclosing sensitive information, and we often see increased activity during filing season," said IRS Commissioner Chuck Rettig. "Tax professionals must remain vigilant. The scammers are very active and very creative." The latest scam email says it is from "IRS Tax E-Filing" and carries the subject line "Verifying your EFIN before e-filing." The IRS warns tax pros not to take any of the steps outlined in the email, especially responding to the email. The body of the bogus email states: In order to help protect both you and your clients from unauthorized/fraudulent activities, the IRS requires that you verify all authorized e-file originators prior to transmitting returns through our system. That means we need your EFIN (e-file identification number) verification and Driver's license before you e-file. Please have a current PDF copy or image of your EFIN acceptance letter (5880C Letter dated within the last 12 months) or a copy of your IRS EFIN Application Summary, found at your e-Services account at IRS.gov, and Front and Back of Driver's License emailed in order to complete the verification process. Email: (fake email address) If your EFIN is not verified by our system, your ability to e-file will be disabled until you provide documentation showing your credentials are in good standing to e-file with the IRS. © 2021 EFILE. All rights reserved. Trademarks 2800 E. Commerce Center Place, Tucson, AZ 85706 Tax professionals who received the scam should save the email as a file and then send it as an attachment to phishing@irs.gov. They also should notify the Treasury Inspector General for Tax Administration at www.tigta.gov to report the IRS impersonation scam. Both TIGTA and the IRS Criminal Investigation division are aware of the scam. Like all phishing email scams, it attempts to bait the receiver to take action (opening a link or attachment) with a consequence for failing to do so (disabling the account). The links or attachment may be set up to steal information or to download malware onto the tax professional's computer. In this case, the tax preparers are being asked to email documents that would disclose their identities and EFINs to the thieves. The thieves can use this information to file fraudulent returns by impersonating the tax professional. Tax professionals also should be aware of other common phishing scams that seek EFINs, Preparer Tax Identification Numbers (PTINs) or e-Services usernames and passwords. Some thieves also pose as potential clients, an especially effective scam currently because there are so many remote transactions during the pandemic. The thief may interact repeatedly with a tax professional and then send an email with an attachment that claims to be their tax information. The attachment may contain malware that allows the thief to track keystrokes and eventually steal all passwords or take over control of the computer systems. Some phishing scams are ransomware schemes in which the thief gains control of the tax professionals' computer systems and holds the data hostage until a ransom is paid. The Federal Bureau of Investigation (FBI) has warned against paying a ransom because thieves often leave the data encrypted. For additional information and help, tax professionals should review Publication 4557, Safeguarding Taxpayer DataPDF and Identity Theft Information for Tax Professionals.

https://www.irs.gov/newsroom/double-check-for-missing-or-incorrect-forms-w-2-1099-before-filing-taxes

IR-2021-33, February 9, 2021 WASHINGTON — With some areas seeing mail delays, the Internal Revenue Service reminds taxpayers to double-check to make sure they have all of their tax documents, including Forms W-2 and 1099, before filing a tax return. The IRS reminds taxpayers that many of these forms may be available online. When other options aren't available, taxpayers who haven't received a W-2 or Form 1099 should contact the employer, payer or issuing agency directly to request the missing documents before filing their 2020 federal tax return. This also applies for those who received an incorrect W-2 or Form 1099. Those who don't get a response, are unable to reach the employer/payer/issuing agency or cannot otherwise get copies or corrected copies of their Forms W-2 or 1099 must still file their tax return on time by the April 15 deadline (or October 15 if requesting an automatic extension). They may need to use Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. to avoid filing an incomplete or amended return. If the taxpayer doesn't receive the missing or corrected form in time to file their tax return by the April deadline, they may estimate the wages or payments made to them, as well as any taxes withheld. Use Form 4852 to report this information on their federal tax return. If the taxpayer receives the missing or corrected Form W-2 or Form 1099-R after filing their return and the information differs from their previous estimate, they must file Form 1040-X, Amended U.S. Individual Income Tax Return. For additional information on filing an amended return, see Topic No. 308 and Should I File an Amended Return? Taxpayers should allow enough time for tax records to arrive in the mail before filing their 2020 tax return. In a normal year, most taxpayers should have received income documents near the end of January, including: Forms W-2, Wage and Tax Statement Form 1099-MISC, Miscellaneous Income Form 1099-INT, Interest Income Form 1099-NEC, Nonemployee Compensation Form 1099-G, Certain Government Payments; like unemployment compensation or state tax refund Incorrect Form 1099-G for unemployment benefits Millions of Americans received unemployment compensation in 2020, many of them for the first time. This compensation is taxable and must be included as gross income on their tax return. Taxpayers who receive an incorrect Form 1099-G for unemployment benefits they did not receive should contact the issuing state agency to request a revised Form 1099-G showing they did not receive these benefits. Taxpayers who are unable to obtain a timely, corrected form from states should still file an accurate tax return, reporting only the income they received. Use IRS.gov IRS tax help is available 24 hours a day on IRS.gov, the official IRS website, where people can find answers to tax questions and resolve tax issues online. The Let Us Help You page helps answer most tax questions, and the IRS Services Guide PDFlinks to other important IRS services.

https://www.irs.gov/newsroom/irs-names-sieger-to-permanent-position-of-cio

IR-2021-32, February 9, 2021 WASHINGTON — The Internal Revenue Service announced today that Nancy Sieger has been selected as the Chief Information Officer. She has served as acting CIO since June 2019. "Nancy has done an exemplary job as Acting CIO supporting delivery of two rounds of Economic Interest Payments totaling more than $420 billion along with individual tax refunds of more than $320 billion during the pandemic," said IRS Commissioner Chuck Rettig. "She is a remarkable person, enjoys tremendous support from our entire IT team and throughout the IRS. She excelled from every perspective during a very challenging time for our organization and we are extremely pleased that Nancy has agreed to continue leading the IT organization." Sieger is responsible for all aspects of IT systems that operate the nation's tax infrastructure. She oversees the 7,000-person IT organization that maintains hundreds of systems and supports the processing of millions of tax returns annually. Sieger previously served as the Deputy CIO for Filing Season and Tax Reform. In that capacity, she provided leadership for executing all technology changes needed to deliver the Tax Cuts and Jobs Act, in addition to ensuring IT delivered a seamless annual tax filing season and integrated software and operational solutions that aligned with modernization goals. She also previously served as the Acting Deputy CIO for Operations and the Associate CIO for Applications Development. A graduate of the IRS 2004 Executive Development class, Nancy has a strong business background. Prior to joining the IT organization, she served in several headquarters and field positions in both Wage and Investment and Small Business/Self Employed Operating Divisions. Throughout her career, Sieger has been committed to the principles of Equal Employment Opportunity and Diversity. She served as chair of the IT Diversity and EEO Advisory Committee and actively mentors employees at all levels. Sieger is the recipient of Fed Scoop 50 awards for exemplary Federal Leadership, a Gears of Government President's Award, and was honored with a Presidential Rank Award for Meritorious Service. Sieger is a graduate of the University of Maryland.

https://www.irs.gov/newsroom/new-irs-form-available-for-self-employed-individuals-to-claim-covid-19-sick-and-family-leave-tax-credits-under-ffcra

IR-2021-31, February 8, 2021 WASHINGTON — The Internal Revenue Service announced today that a new form is available for eligible self-employed individuals to claim sick and family leave tax credits under the Families First Coronavirus Response Act (FFCRA). Eligible self-employed individuals will determine their qualified sick and family leave equivalent tax credits with the new IRS Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed IndividualsPDF. They'll claim the tax credits on their 2020 Form 1040 for leave taken between April 1, 2020, and December 31, 2020, and on their 2021 Form 1040 for leave taken between January 1, 2021, and March 31, 2021. The FFCRA, passed in March 2020, allows eligible self-employed individuals who, due to COVID-19 are unable to work or telework for reasons relating to their own health or to care for a family member to claim refundable tax credits to offset their federal income tax. The credits are equal to either their qualified sick leave or family leave equivalent amount, depending on circumstances. IRS.gov has instructions to help calculate the qualified sick leave equivalent amount and qualified family leave equivalent amount. Certain restrictions apply. Who may file Form 7202 Eligible self-employed individuals must: Conduct a trade or business that qualifies as self-employment income, and Be eligible to receive qualified sick or family leave wages under the Emergency Paid Sick Leave Act or Emergency Family and Medical Leave Expansion Act as if the taxpayer was an employee.  Taxpayers must maintain appropriate documentation establishing their eligibility for the credits as an eligible self-employed individual. Resources: Form 7202 and instructions Coronavirus (COVID-19) tax relief IRS Publication 5419, New COVID-19 Employer Tax Credits (obsolete) FFCRA related Q&As

https://www.irs.gov/newsroom/beware-of-ghost-preparers-who-dont-sign-tax-returns

IR-2021-30, February 5, 2021 WASHINGTON — The Internal Revenue Service reminds taxpayers to avoid "ghost" tax return preparers whose refusal to sign returns can cause a frightening array of problems. It is important to file a valid, accurate tax return because the taxpayer is ultimately responsible for it. Ghost preparers get their scary name because they don't sign tax returns they prepare. Like a ghost, they try to be invisible to the fact they've prepared the return and will print the return and get the taxpayer to sign and mail it. For e-filed returns, the ghost preparer will prepare but refuse to digitally sign it as the paid preparer. By law, anyone who is paid to prepare or assists in preparing federal tax returns must have a valid Preparer Tax Identification Number, or PTIN. Paid preparers must sign and include their PTIN on the return. Not signing a return is a red flag that the paid preparer may be looking to make a fast buck by promising a big refund or charging fees based on the size of the refund. Unscrupulous tax return preparers may also: Require payment in cash only and not provide a receipt. Invent income to qualify their clients for tax credits. Claim fake deductions to boost the size of the refund. Direct refunds into their bank account, not the taxpayer's account. The IRS urges taxpayers to choose a tax return preparer wisely. The Choosing a Tax Professional page on IRS.gov has information about tax preparer credentials and qualifications. The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help identify many preparers by type of credential or qualification. No matter who prepares the return, the IRS urges taxpayers to review it carefully and ask questions about anything not clear before signing. Taxpayers should verify both their routing and bank account number on the completed tax return for any direct deposit refund. And taxpayers should watch out for preparers putting their bank account information onto the returns. Taxpayers can report preparer misconduct to the IRS using IRS Form 14157, Complaint: Tax Return PreparerPDF. If a taxpayer suspects a tax preparer filed or changed their tax return without their consent, they should file Form 14157-A, Tax Return Preparer Fraud or Misconduct AffidavitPDF.

https://www.irs.gov/newsroom/irs-names-maloy-as-director-of-taxpayer-first-act-office

IR-2021-29, February 5, 2021 WASHINGTON – The Internal Revenue Service today named Heather C. Maloy to the position of director, Taxpayer First Act Office. She will report directly to the IRS Commissioner in her new role. The IRS continues work on the Taxpayer First Act, part of legislation passed in July 2019. The IRS delivered the Taxpayer First Act Report to CongressPDF earlier this year, providing a comprehensive set of recommendations that will reshape the taxpayer experience, enhance employee training and restructure the organization to increase collaboration and innovation. "I'm truly pleased to welcome Heather back to the IRS and into this critical role," said IRS Commissioner Chuck Rettig. "Given Heather's vast knowledge and leadership experience from both inside and outside the IRS, she will be an important asset to both the IRS and the nation's taxpayers going forward as we strategically implement the Taxpayer First Act report's recommendations." Maloy replaces Lia Colbert, who will continue in her current role as Deputy Chief of the Independent Office of Appeals. Colbert is a long-time IRS executive who formerly served as both TFA lead and Chief of Staff before moving to Appeals in October 2020. In her new position, Maloy will provide advice and assistance to the Commissioner in areas such as implementation strategy, management and organizational issues and equitable treatment of taxpayers. She will help set the strategic direction of IRS programs with a focus on a comprehensive taxpayer experience strategy, a holistic training strategy and a modernized IRS organizational structure. Maloy recently retired from her position as a Principal at Ernst & Young, LLP, where she led a national practice group of specialized tax professionals in serving large, multinational corporations, partnerships, tax-exempt organizations and individuals navigating IRS tax controversies. In her previous roles at IRS, Maloy served as the Commissioner, Large Business and International Division (LB&I), where she led over 5,000 employees and oversaw tax compliance programs for corporations, subchapter S corporations and partnerships with assets greater than $10 million and incorporated international tax compliance operations into the division. During her tenure, she oversaw the successful expansion of the Compliance Assurance Process, championed the development of new audit procedures to increase transparency and discipline in the LB&I audit process, including the Information Document Request (IDR) procedures and oversaw the issuance and implementation of the Uncertain Tax Position reporting requirements. She also acted as the Deputy Commissioner for Services and Enforcement. Prior to her selection as the LB&I Commissioner, Maloy held several other prominent IRS positions, including Associate Chief Counsel for both the Income Tax & Accounting and Passthroughs & Special Industries Divisions and Assistant to the Commissioner. From 2006-2009, she was Counsel at Skadden, Arps, Slate, Meagher & Flom's Tax Group. Maloy graduated from Emory University, received her law degree from Cornell Law School and an LL.M. in Taxation from the University of Florida School of Law.

https://www.irs.gov/newsroom/educators-can-now-deduct-out-of-pocket-expenses-for-covid-19-protective-items

IR-2021-28, February 4, 2021 WASHINGTON — Eligible educators can deduct unreimbursed expenses for COVID-19 protective items to stop the spread of COVID-19 in the classroom. COVID-19 protective items include, but are not limited to: face masks; disinfectant for use against COVID-19; hand soap; hand sanitizer; disposable gloves; tape, paint or chalk to guide social distancing; physical barriers (for example, clear plexiglass); air purifiers; and other items recommended by the Centers for Disease Control and Prevention (CDC) to be used for the prevention of the spread of COVID-19. Rev. Proc. 2021-15PDF, issued today, provides guidance related to educators and their expenses under the COVID-related Tax Relief Act of 2020, which was enacted as part of the Consolidated Appropriations Act, 2021. The new law clarifies that unreimbursed expenses paid or incurred after March 12, 2020, by eligible educators for protective items to stop the spread of COVID-19 qualify for the educator expense deduction. The educator expense deduction rules permit eligible educators to deduct up to $250 of qualifying expenses per year ($500 if married filing jointly and both spouses are eligible educators, but not more than $250 each). Eligible educators include any individual who is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide in a school for at least 900 hours during a school year. This deduction is for expenses paid or incurred during the tax year. Taxpayers claim the deduction on Form 1040, Form 1040-SR or Form 1040-NR (attach Schedule 1 (Form 1040) PDF). For additional information regarding the deduction for certain expenses of an eligible educator, see the Instructions for Form 1040 and Form 1040-SRPDF or the Instructions for Form 1040-NR. For more information about this, the COVID-related Tax Relief Act of 2020 and other tax changes, visit IRS.gov.  

https://www.irs.gov/newsroom/irs-to-recalculate-taxes-on-unemployment-benefits-refunds-to-start-in-may

IR-2021-71, March 31, 2021 WASHINGTON — To help taxpayers, the Internal Revenue Service announced today that it will take steps to automatically refund money this spring and summer to people who filed their tax return reporting unemployment compensation before the recent changes made by the American Rescue Plan. The legislation, signed on March 11, allows taxpayers who earned less than $150,000 in modified adjusted gross income to exclude unemployment compensation up to $20,400 if married filing jointly and $10,200 for all other eligible taxpayers. The legislation excludes only 2020 unemployment benefits from taxes. Because the change occurred after some people filed their taxes, the IRS will take steps in the spring and summer to make the appropriate change to their return, which may result in a refund. The first refunds are expected to be made in May and will continue into the summer. For those taxpayers who already have filed and figured their tax based on the full amount of unemployment compensation, the IRS will determine the correct taxable amount of unemployment compensation and tax. Any resulting overpayment of tax will be either refunded or applied to other outstanding taxes owed. For those who have already filed, the IRS will do these recalculations in two phases, starting with those taxpayers eligible for the up to $10,200 exclusion. The IRS will then adjust returns for those married filing jointly taxpayers who are eligible for the up to $20,400 exclusion and others with more complex returns. There is no need for taxpayers to file an amended return unless the calculations make the taxpayer newly eligible for additional federal credits and deductions not already included on the original tax return. For example, the IRS can adjust returns for those taxpayers who claimed the Earned Income Tax Credit (EITC) and, because the exclusion changed the income level, may now be eligible for an increase in the EITC amount which may result in a larger refund. However, taxpayers would have to file an amended return if they did not originally claim the EITC or other credits but now are eligible because the exclusion changed their income. These taxpayers may want to review their state tax returns as well. According to the U.S. Department of Labor, Office of Employment and Training (ETA), over 23 million U.S. workers nationwide filed for unemployment last year. For the first time, some self-employed workers qualified for unemployed benefits as well. The IRS is working to determine how many workers affected by the tax change already have filed their tax returns. The new IRS guidance also includes details for those eligible taxpayers who have not yet filed. The IRS has worked with the tax return preparation software industry to reflect these updates so people who choose to file electronically simply need to respond to the related questions when electronically preparing their tax returns. See New Exclusion of up to $10,200 of Unemployment Compensation for information and examples. For others, instructions and an updated worksheet about the exclusion were available in March and posted to IRS.gov/form1040. These instructions can assist taxpayers who have not yet filed to prepare returns correctly.

https://www.irs.gov/newsroom/emergency-aid-granted-to-students-due-to-covid-is-not-taxable

IR-2021-70, March 30, 2021 WASHINGTON — The Internal Revenue Service issued frequently asked questions today on how students and higher education institutions should report pandemic-related emergency financial aid grants. Students Emergency financial aid grants made by a federal agency, state, Indian tribe, higher education institution or scholarship-granting organization (including a tribal organization) to a student because of an event related to the COVID-19 pandemic are not included in the student's gross income. Also, students should not reduce an amount of qualified tuition and related expenses by the amount of an emergency financial aid grant. If students used any portion of the grants to pay for qualified tuition and related expenses on or before December 31, 2020, they may be eligible to claim a tuition and fees deduction or the American Opportunity Credit or Lifetime Learning Credit on their 2020 tax return. See Higher Education Emergency Grants Frequently Asked Questions. The tuition and fees deduction is not available for tax years beginning after December 31, 2020. For additional information on these credits and the tuition and fees deduction, see Publication 970, Tax Benefits for Education. Higher Education Institutions Because students don't include emergency financial aid grants in their gross income, higher education institutions are not required to file or furnish Forms 1099-MISC reporting the grants made available by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) or the COVID-related Tax Relief Act (COVID Relief Act) and do not need to report the grants in Box 5 of Form 1098-T. But any amounts that qualify for the tuition and fees deduction or the American Opportunity Credit or Lifetime Learning Credit are considered "qualified tuition and related expenses" and trigger the reporting requirements of Internal Revenue Code section 6050S. Higher education institutions must include qualified tuition and related expenses paid by emergency financial aid grants awarded to students in Box 1 of Form 1098-T.

https://www.irs.gov/newsroom/irs-projects-stimulus-payments-to-non-filer-social-security-and-other-federal-beneficiaries-will-be-disbursed-later-this-week

IR-2021-69, March 30, 2021 WASHINGTON — As work continues on issuing millions of Economic Impact Payments to Americans, the Internal Revenue Service and Treasury Department announced today that they anticipate payments will begin to be issued this weekend to Social Security recipients and other federal beneficiaries who do not normally file a tax return, with the projection that the majority of these payments would be sent electronically and received on April 7. After receiving data from the Social Security Administration on Thursday, March 25, the IRS began the multi-step process to review, validate, and test tens of millions of records to ensure eligibility and proper calculation of Economic Impact Payments. If no additional issues arise, the IRS currently expects to complete that work and to begin processing these payment files at the end of this week. Because the majority of these payments will be disbursed electronically – through direct deposits and payments to existing Direct Express cards – they would be received on the official payment date of April 7. Many federal beneficiaries who filed 2019 or 2020 returns or used the Non-Filers tool last year were issued Economic Impact Payments, if eligible, during the last three weeks. The update today applies to Social Security retirement, survivor or disability (SSDI), Supplemental Security Income (SSI), and Railroad Retirement Board (RRB) beneficiaries who did not file a 2019 or 2020 tax return or did not use the Non-Filers tool. "IRS employees are working tirelessly to once again deliver Economic Impact Payments to the nation's taxpayers as quickly as possible," said IRS Commissioner Chuck Rettig. "Our teams immediately began processing data we received last week for federal benefit recipients. We know how important these payments are, and we are doing everything we can to make these payments as fast as possible to these important individuals." The Get My Payment tool is updated for eligible individuals once their payment is processed. The IRS notes that the Get My Payment tool on IRS.gov will not be updated until the weekend of April 3-4 with information for federal beneficiaries expecting payments next week. The IRS continues to review data received for Veterans Affairs (VA) benefit recipients and expects to determine a payment date and provide more details soon. Currently, the IRS estimates that Economic Impact Payments for VA beneficiaries who do not regularly file tax returns could be disbursed by mid-April. VA beneficiary payment information will be available in the Get My Payment tool at a future date. Federal benefit payments automatic; no action for most Most Social Security retirement and disability beneficiaries, railroad retirees and recipients of veterans benefits who are eligible for an Economic Impact Payment do not need to take any action to receive a payment. These payments will be automatic. Like the previous Economic Impact Payments, Social Security and other federal beneficiaries will generally receive this third payment the same way that they receive their regular benefits. Some federal benefit recipients may need to file a 2020 tax return, even if they don't usually file, to provide information the IRS needs to send payments for any qualified dependent. Eligible individuals in this group should file a 2020 tax return to be considered for an additional payment for their qualified dependent as quickly as possible. Some federal benefit recipients already have received an Economic Impact Payment The IRS emphasizes that federal benefit recipients in these groups who file tax returns already started to receive Economic Impact Payments earlier this month, along with other taxpayers. Because some federal benefit recipients do not file tax returns, the IRS did not have in its tax systems the current information needed to generate the Economic Impact Payments. Last year, the IRS took the unprecedented step to receive and review data from other federal agencies and use that data to deliver payments automatically to these recipients. This action – which had never occurred in previous stimulus efforts – minimized risk and burdens for the American public during the pandemic. Due to regular changes in the federal benefits population, the IRS needed to receive updated information this month from other government agencies. With these critical updates, eligible federal benefit recipients who don't normally file an income tax return will get a payment automatically in the next few weeks. Making these automatic payments to federal beneficiaries involves a complex, multi-step process to handle recipient data from the other agencies. For the first round of Economic Impact Payments last year, recipients in these groups received payments within four to six weeks after the CARES Act was signed into law. For the American Rescue Plan signed March 11, the IRS projects that it is on track to deliver Economic Impact Payments to federal beneficiaries at the same or faster speed. More details on this third round of Economic Impact Payments and federal benefit recipients will be available soon on IRS.gov. Other work continues on Economic Impact Payments; watch mail for checks, EIP Cards In addition to work for federal benefit recipients, the IRS also continues to prepare and deliver additional Economic Impact Payments for other eligible individuals – as well as deliver tax refunds. For those receiving payments in the mail, the IRS urges these taxpayers to continue to watch their mail for these payments, which could include a paper Treasury check or a special prepaid debit card called an EIP Card. Taxpayers should note that the form of payment for the third Economic Impact Payment, including for some Social Security and other federal beneficiaries, may be different than earlier stimulus payments. More people are receiving direct deposits, while those receiving payments in the mail may receive either a paper check or an EIP Card – which may be different than how they received their previous Economic Impact Payments. Special reminder for those who don't normally file a tax return People who don't normally file a tax return and don't receive federal benefits may qualify for these Economic Impact Payments. This includes those experiencing homelessness, the rural poor, and others. For those eligible individuals who didn't get a first or second Economic Impact Payment or got less than the full amounts, they may be eligible for the 2020 Recovery Rebate Credit, but they'll need to file a 2020 tax return. See the special section on IRS.gov: Claiming the 2020 Recovery Rebate Credit if you aren't required to file a tax return. Free tax return preparation is available for qualifying people. The IRS reminds taxpayers that the income levels in this new round of Economic Impact Payments have changed. This means that some people won't be eligible for the third payment even if they received a first or second Economic Impact Payment or claimed a 2020 Recovery Rebate Credit. Payments will begin to be reduced for individuals making $75,000 or above in Adjusted Gross Income ($150,000 for married filing jointly). The payments end at $80,000 for individuals ($160,000 for married filing jointly); people with Adjusted Gross Incomes above these levels are ineligible for a payment. Individuals can check the Get My Payment tool on IRS.gov to see the payment status of these payments. Additional information on Economic Impact Payments is available on IRS.gov.

https://www.irs.gov/newsroom/irs-warns-university-students-and-staff-of-impersonation-email-scam

IR-2021-68, March 30, 2021 WASHINGTON — The Internal Revenue Service today warned of an ongoing IRS-impersonation scam that appears to primarily target educational institutions, including students and staff who have ".edu" email addresses. The IRS' phishing@irs.gov has received complaints about the impersonation scam in recent weeks from people with email addresses ending in ".edu." The phishing emails appear to target university and college students from both public and private, profit and non-profit institutions. Taxpayers who believe they have a pending refund can easily check on its status at Where's My Refund? on IRS.gov. The suspect emails display the IRS logo and use various subject lines such as "Tax Refund Payment" or "Recalculation of your tax refund payment." It asks people to click a link and submit a form to claim their refund. The phishing website requests taxpayers provide their: Social Security number First Name Last Name Date of Birth Prior Year Annual Gross Income (AGI) Driver's License Number Current Address City State/U.S. Territory ZIP Code/Postal Code Electronic Filing PIN People who receive this scam email should not click on the link in the email, but they can report it to the IRS. For security reasons, save the email using "save as" and then send that attachment to phishing@irs.gov or forward the email as an attachment to phishing@irs.gov. The Treasury Inspector General for Tax Administration (TIGTA) and IRS Criminal Investigation have been notified. Taxpayers who believe they may have provided identity thieves with this information should consider immediately obtaining an Identity Protection PIN. This is a voluntary opt-in program. An IP PIN is a six-digit number that helps prevent identity thieves from filing fraudulent tax returns in the victim's name. Taxpayers who attempt to e-file their tax return and find it rejected because a return with their SSN already has been filed should file a Form 14039, Identity Theft AffidavitPDF, to report themselves as a possible identity theft victim. See Identity Theft Central to learn about the signs of identity theft and actions to take.

https://www.irs.gov/newsroom/irs-extends-additional-tax-deadlines-for-individuals-to-may-17

IR-2021-67, March 29, 2021 WASHINGTON — The Internal Revenue Service today announced that individuals have until May 17, 2021 to meet certain deadlines that would normally fall on April 15, such as making IRA contributions and filing certain claims for refund. This follows a previous announcement from the IRS on March 17, that the federal income tax filing due date for individuals for the 2020 tax year was extended from April 15, 2021, to May 17, 2021. Notice 2021-21PDF provides details on the additional tax deadlines which have been postponed until May 17. Time to make contributions to IRAs and health savings accounts extended to May 17 In extending the deadline to file Form 1040 series returns to May 17, the IRS is automatically postponing to the same date the time for individuals to make 2020 contributions to their individual retirement arrangements (IRAs and Roth IRAs), health savings accounts (HSAs), Archer Medical Savings Accounts (Archer MSAs), and Coverdell education savings accounts (Coverdell ESAs). This postponement also automatically postpones to May 17, 2021, the time for reporting and payment of the 10% additional tax on amounts includible in gross income from 2020 distributions from IRAs or workplace-based retirement plans. Notice 2021-21 also postpones the due date for Form 5498 series returns related to these accounts to June 30, 2021. 2017 unclaimed refunds – deadline extended to May 17 For tax year 2017 Federal income tax returns, the normal April 15 deadline to claim a refund has also been extended to May 17, 2021. The law provides a three-year window of opportunity to claim a refund. If taxpayers do not file a return within three years, the money becomes property of the U.S. Treasury. The law requires taxpayers to properly address, mail and ensure the tax return is postmarked by the May 17, 2021, date. Additionally, foreign trusts and estates with federal income tax filing or payment obligations, who file Form 1040-NR, now have until May 17, 2021. 2021 AFSP deadline postponed to May 17 Tax preparers interested in voluntarily participating in the Annual Filing Season Program (AFSP) for calendar-year 2021 now have until May 17, 2021 to file their application with the Internal Revenue Service. The normal due date is April 15. Details on this extension are in Notice 2021-21, posted on IRS.gov. For more information about the Annual Filing Season Program, visit the Tax Pros page on IRS.gov. Estimated tax payment due April 15 Notice 2021-21, issued today does not alter the April 15, 2021, deadline for estimated tax payments; these payments are still due on April 15. Taxes must be paid as taxpayers earn or receive income during the year, either through withholding or estimated tax payments. In general, estimated tax payments are made quarterly to the IRS by people whose income isn't subject to income tax withholding, including self-employment income, interest, dividends, alimony or rental income. Most taxpayers automatically have their taxes withheld from their paychecks and submitted to the IRS by their employer. Updates regarding tax relief as a result of the COVID-19 pandemic can be found at IRS.gov.

https://www.irs.gov/newsroom/face-masks-and-other-personal-protective-equipment-to-prevent-the-spread-of-covid-19-are-tax-deductible

IR-2021-66, March 26, 2021 WASHINGTON — The Internal Revenue Service issued Announcement 2021-7PDF today clarifying that the purchase of personal protective equipment, such as masks, hand sanitizer and sanitizing wipes, for the primary purpose of preventing the spread of coronavirus are deductible medical expenses. The amounts paid for personal protective equipment are also eligible to be paid or reimbursed under health flexible spending arrangements (health FSAs), Archer medical savings accounts (Archer MSAs), health reimbursement arrangements (HRAs), or health savings accounts (HSAs). For more information on determining what is deductible, see Can I Deduct My Medical and Dental Expenses? and Publication 502, Medical and Dental Expenses.

https://www.irs.gov/newsroom/irs-criminal-investigation-ci-pledges-continued-commitment-to-investigating-covid-19-fraud-as-cares-act-reaches-one-year-anniversary

IR-2021-65, March 25, 2021 WASHINGTON — The Internal Revenue Service's Criminal Investigation Division (IRS-CI) marks the one-year anniversary of the Coronavirus Aid, Relief and Economic Security (CARES) Act by pledging its continued commitment to investigating COVID-19 fraud. Over the last year, IRS-CI has been combatting COVID-19 fraud related to the Economic Impact Payments, Paycheck Protection Program (PPP) and Employee Retention Credit. The agency has investigated more than 350 tax and money laundering cases nationwide totaling $440 million. These investigations covered a broad range of criminal activity, including fraudulently obtained loans, credits and payments meant for American workers, families, and small businesses. "Criminals have tried funding their lavish lifestyles with money intended to provide Americans relief during one of the most difficult times in recent history", said Jim Lee, Chief of IRS Criminal Investigation. "We have investigated cases of criminals flaunting stolen money to buy fancy cars, boats and pay for luxury apartments while families and businesses struggle to make ends meet. IRS-CI special agents have done an extraordinary job identifying millions in stolen money and our work is far from over. We will not cease until every fraudulently obtained dollar is accounted for and the individuals behind the schemes are prosecuted to the fullest extent of the law." IRS-CI encourages the public to share information regarding known or suspected fraud attempts against any of the programs offered through the CARES Act. To report a suspected crime, taxpayers may visit IRS.gov. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020, to provide emergency financial assistance to millions of Americans suffering the economic effects of the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the Paycheck Protection Program. In April 2020, Congress authorized over $300 billion in additional funding, and in December 2020, another $284 billion. The Paycheck Protection Program allows qualifying small businesses and certain other organizations to receive loans with a maturity of two to five years and an interest rate of 1%. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses. To learn more about COVID-19 scams and other financial schemes visit IRS.gov. Official IRS information about COVID-19 and Economic Impact Payments can be found on the Coronavirus Tax Relief page, which is updated frequently.

https://www.irs.gov/newsroom/j5-countries-host-challenge-aimed-at-fintech-companies

IR-2021-64, March 25, 2021 WASHINGTON — The Joint Chiefs of Global Tax Enforcement (J5) brought together investigators, cryptocurrency experts and data scientists in a coordinated push to track down individuals and organizations perpetrating tax crimes around the world this week. The event, known as 'The Challenge,' includes experts from each country with the mission of optimizing data from a variety of open and investigative sources available to each country, including offshore account information. Using various analytical tools, members of each country were put into teams and tasked with generating leads and finding tax offenders using cryptocurrency based on the new data available to them through The Challenge. Working within existing treaties, real data sets from each country were brought to the challenge to make connections where current individual efforts would take years to make those same connections. The Challenge was first hosted in 2018 by the Fiscal Intelligence and Investigation Service (FIOD) in Utrecht in 2018 and brought together leading data scientists, technology experts and investigators from all J5 countries in a coordinated push to track down those who make a living out of facilitating and enabling international tax crime. The following year, the U.S. hosted a second "Challenge" in Los Angeles focused on cryptocurrency. "While a great deal of preparation goes into these events, the Challenges are by no means a rehearsal for us," said Jim Lee, Chief, IRS Criminal Investigation. "As evidenced from the last couple of years, these Challenges result in real enforcement actions taken by the J5. They serve as an opportunity to continue to share information and further develop leads, but they also jumpstart investigations. I expect we will see results from this Challenge in the months and years to come." This year the challenge focused on Financial Technology (FINtech) companies. FINtech companies invent new and innovative financial solutions, mainly making use of the digital opportunities the internet offers. Many FINtech companies develop and market new financial products and payment possibilities like cryptocurrency, payment processing platforms like PayPal, crowdfunding loans, and insurance. With these products, FINtech companies are competing with large traditional financial institutes like banks and insurance companies and profits in the billions of dollars are not unheard of. "In a fast-changing digital world, the J5 also must adjust and change," said Niels Obbink, General Director of FIOD. "During this challenge, experts have worked hard to focus on the legal opportunities countries have to start J5 investigations aimed at FINtech companies." Many FINtech companies have adopted compliance regulations and are partnering with governments and law enforcement in prohibiting financial crime. However, due to the online nature of the products, the novelty and the lack of regulation and compliance in some areas, the FINtech industry can be used by tax avoiders and money launderers to commit crimes. All FINtech companies have one attribute in common: they trade in intangible online assets and services. Because of that intangible nature, they can trade from anywhere in the world, only limited by the availability of the Internet. Government regulation on cryptocurrency and financial services have led to the need for FINtech companies having a physical presence in particular countries or areas. This year the J5 challenge was held virtually due to the COVID-19 pandemic. While international collaboration of this magnitude benefits from in-person interaction, the team was able to engage with each other through virtual platforms. Because of the virtual nature of the event and the time differences between the countries, the Challenge was split into multiple phases. In the first phase of the challenge, legal experts of the five countries discussed the fiscal, compliance and criminal options that each country had regarding FINtech companies. During the second phase, the five countries developed a list of specific companies where leads suggested criminal behavior. By the conclusion of the Challenge, each country identified specific companies that will be a part of their investigations. This year's Challenge followed a virtual February meeting of all five J5 Chiefs where each country reiterated their dedication to the alliance and expressed excitement about the operational results to come. In early March, the Chief Executive Officer and an associate of Sky Global were indicted on charges that they participated in a criminal enterprise that facilitated the transnational importation and distribution of narcotics through the sale and service of encrypted communications devices. Earlier this week, a ten-count indictment was returned by a federal grand jury in Brooklyn charging Jason Peltz with securities fraud, money laundering, tax evasion and a variety of other offenses. Both cases were worked under the umbrella of the J5. The J5 was formed in 2018 after a call to arms from the OECD Taskforce on Tax Crime and has been working together to gather information, share intelligence and conduct coordinated operations, making significant progress in each country's fight against transnational tax crime. The J5 includes the Australian Taxation Office (ATO), the Canada Revenue Agency (CRA), the Dutch Fiscal Information and Investigation Service (FIOD), Her Majesty's Revenue and Customs (HMRC) from the UK and the Internal Revenue Service Criminal Investigation Division (IRS-CI) from the US. Please visit the J5 webpage for more information about the J5.

https://www.irs.gov/newsroom/irs-treasury-disburse-another-37-million-economic-impact-payments-from-the-american-rescue-plan

IR-2021-63, March 24, 2021 WASHINGTON — Today, the Internal Revenue Service, the U.S. Department of the Treasury and the Bureau of the Fiscal Service announced they are disbursing approximately 37 million payments in the second batch of Economic Impact Payments from the American Rescue Plan. This brings the total disbursed payments from the American Rescue Plan to approximately 127 million payments worth approximately $325 billion. As announced on March 12, Economic Impact Payments will continue to roll out in batches to millions of Americans in the coming weeks. The second batch of payments includes direct deposits, as well as paper checks and debit cards being sent through the mail. Here is additional information on the second batch of payments: Like the first batch of payments, the payments announced today primarily were sent to eligible taxpayers who filed 2019 or 2020 returns. People who don't typically file a return but who successfully used the Non-Filers tool on IRS.gov last year were sent payments in this batch. In total, this second batch includes approximately 37 million payments, with a total value of nearly $83 billion. As part of that, this batch of payments includes approximately 17 million direct deposit payments, with a total value of more than $38 billion. These payments began processing on Friday, March 19, and some Americans saw the direct deposit payments as pending or as provisional payments in their accounts before today's official payment date. In addition, this batch of payments includes nearly 15 million paper checks (with a total value of nearly $34 billion) and approximately 5 million prepaid debit cards (with a total value of around $11 billion). Paper checks and debit cards – known as EIP cards –began processing on Friday, March 19, and will continue to be sent by mail over the next few weeks. As announced last week, the first batch of payments was mostly sent by direct deposit. Here is additional information on the first batch of payments: The first batch of payments began processing on Friday, March 12, and some Americans saw the direct deposit payments as pending or as provisional payments in their accounts before the official payment date of March 17. The first batch of payments primarily was sent to eligible taxpayers who provided direct deposit information on their 2019 or 2020 returns, including people who don't typically file a return but who successfully used the Non-Filers tool on IRS.gov last year. In total, the first batch included approximately 90 million payments, with a total value of more than $242 billion. The use of direct deposit to issue these payments means that they were disbursed remarkably faster than would otherwise be possible. While most payments were disbursed by direct deposit, Treasury mailed roughly 150,000 checks worth approximately $442 million. Additional batches of payments will be sent in the coming weeks as direct deposits and through the mail as paper checks or debit cards. The vast majority of all Economic Impact Payments will be issued by direct deposit. No action is needed by most taxpayers. Many federal beneficiaries who filed 2019 or 2020 returns or used the Non-Filers tool were included in these first two batches of payments, if eligible. For federal beneficiaries who did not file a 2019 or 2020 tax return or did not use the Non-Filers tool, the IRS is working directly with the Social Security Administration, the Railroad Retirement Board, and the Veterans Administration to obtain updated 2021 information to ensure that as many people as possible are sent fast, automatic payments. More information about when these payments will be made will be provided on IRS. gov as soon as it becomes available. Individuals can check the Get My Payment tool on IRS.gov to see the payment status of these payments. Additional information on Economic Impact Payments is available on IRS.gov.

https://www.irs.gov/newsroom/more-economic-impact-payments-set-for-disbursement-in-coming-days-taxpayers-should-watch-mail-for-paper-checks-debit-cards

IR-2021-62, March 22, 2021 WASHINGTON — The Internal Revenue Service announced today that the next batch of Economic Impact Payments will be issued to taxpayers this week, with many of these coming by paper check or prepaid debit card. For taxpayers receiving direct deposit, this batch of payments began processing on Friday and will have an official pay date of Wednesday, March 24, with some people seeing these in their accounts earlier, potentially as provisional or pending deposits. A large number of this latest batch of payments will also be mailed, so taxpayers who do not receive a direct deposit by March 24 should watch the mail carefully in the coming weeks for a paper check or a prepaid debit card, known as an Economic Impact Payment Card, or EIP Card. No action is needed by most people to obtain this round of Economic Impact Payments (EIPs). People can check the Get My Payment tool on IRS.gov on to see if the their payment has been scheduled. "The IRS continues to send the third round of stimulus payments in record time," said IRS Commissioner Chuck Rettig. "Since this new set of payments will include more mailed payments, we urge people to carefully watch their mail for a check or debit card in the coming weeks." Following enactment of the American Rescue Plan Act on March 11, the IRS moved quickly to start delivering the third round of Economic Impact Payments. The IRS initiated the first batch of the $1,400 stimulus payments, mostly by direct deposit, on March 12. Today marks the second batch of payments, with additional payments anticipated on a weekly basis going forward. The vast majority of taxpayers receiving EIPs will receive it by direct deposit. In addition, the IRS and the Bureau of the Fiscal Service leveraged data in their systems to convert many payments to direct deposits that otherwise would have been sent as paper checks or debit cards. This accelerated the disbursement of these payments by weeks. Watch the mail for paper checks, EIP Cards Taxpayers should note that the form of payment for the third EIP may be different than earlier stimulus payments. More people are receiving direct deposits, while those receiving them in the mail may get either a paper check or an EIP Card – which may be different than how they received their previous stimulus payments. IRS and the Treasury Department urge eligible people who have not received a direct deposit to watch their mail carefully during this period. Paper checks will arrive by mail in a white envelope from the U.S. Department of the Treasury. For those taxpayers who received their tax refund by mail, this paper check will look similar, but will be labeled as an "Economic Impact Payment" in the memo field.   The EIP Card will also come in a white envelope prominently displaying the seal of the U.S. Department of the Treasury. The card has the Visa name on the front and the issuing bank, MetaBank, N.A. on the back. Information included with the card will explain that this is an Economic Impact Payment. Each mailing will include instructions on how to securely activate and use the card. It is important to note that none of the EIP cards issued for any of the three rounds is reloadable; recipients will receive a separate card and will not be able to reload funds onto an existing card. EIP Cards are safe, convenient, and secure. EIP Card recipients can make purchases online or in stores anywhere Visa Debit Cards are accepted. They can get cash from domestic in-network ATMs, transfer funds to a personal bank account, and obtain a replacement EIP Card if needed without incurring any fees. They can also check their card balance online, through a mobile app, or by phone without incurring fees. The EIP Card provides consumer protections against fraud, loss, and other errors. The EIP Card is sponsored by the Bureau of the Fiscal Service and is issued by Treasury's financial agent, MetaBank, N.A. The IRS does not determine who receives a prepaid debit card. More information about these cards is available at EIPcard.com.   How will taxpayers receive their stimulus payment? Taxpayers with direct deposit information on file with the IRS will receive the payment that way. For those without direct deposit information on file with the IRS, the IRS will use federal records of recent payments to or from the government, where available, to make the payment as a direct deposit. This helps to expedite payment delivery. Otherwise, taxpayers will receive their payment as a check or debit card in the mail. If the direct deposit information is sent to a closed bank account, the payment will be reissued by mail to the address on file with the IRS. The IRS encourages taxpayers to check the Get My Payment tool for additional information. Highlights of the third round of Economic Impact Payments In general, most eligible people will get $1,400 for themselves (those filing joint returns will get $2,800) and $1,400 for each of their qualifying dependents claimed on their tax return. Eligible families will get a payment based on all of their qualifying dependents claimed on their return, including older relatives like college students, adults with disabilities, parents, and grandparents. Unlike the first two payments, the third stimulus payment is not restricted to children under 17. Because these payments are automatic for most eligible people, contacting either financial institutions or the IRS on payment timing will not speed up their arrival. The amount of an eligible individual's EIP3 will be based on the taxpayer's latest processed tax return from either 2020 or 2019. This includes anyone who registered online at IRS.gov using the agency's Non-Filers tool last year or submitted a special simplified tax return to the IRS. If the IRS has received and processed a taxpayer's 2020 return, the agency will instead calculate the amount of the individual's EIP3 based on that return. If a taxpayer's payment is less than the full amount and is based on their 2019 return, they may qualify for a supplemental payment after they file their 2020 return. The IRS will automatically reevaluate their eligibility. If the agency determines that they are entitled to a larger payment or the full payment, it will send them a supplemental payment covering the difference between what they originally received and the larger amount. If the re-evaluated amount is smaller, they won't need to pay back the difference. Aside from filing a 2020 tax return, no action is needed on their part. In addition, the IRS will automatically send EIP3 to people who didn't file a return but receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits, Supplemental Security Income (SSI) or Veterans Affairs benefits. This is similar to the first and second rounds of Economic Impact Payments. Social Security and other federal beneficiaries will generally receive this third payment the same way as their regular benefits. The IRS is working directly with the Social Security Administration, the Railroad Retirement Board, and the Veterans Administration to obtain updated 2021 information for recipients to ensure it is sending automatic payments to as many people as possible. More information about when these payments will be made will be provided on IRS.gov as soon as it becomes available. While payments will be automatic for many people based on their federal benefits information, some may need to file a 2020 tax return, even if they don't usually file, to provide information the IRS needs to send payments for any qualified dependent. People in this group should file a 2020 tax return to be considered for an additional payment for their dependent as quickly as possible. Special reminder for those who don't normally file a tax return People who don't normally file a tax return and don't receive federal benefits may qualify for these stimulus payments. This includes those experiencing homelessness and others. If you're eligible and didn't get a first or second Economic Impact Payment (that is, an EIP1 or EIP2) or got less than the full amounts, you may be eligible for the 2020  Recovery Rebate Credit , but you'll need to file a 2020 tax return. See the special section on IRS.gov: Claiming the 2020 Recovery Rebate Credit if you aren't required to file a tax return. Free tax return preparation is available for qualifying people. The IRS reminds taxpayers that the income levels in this new round of stimulus payments have changed. This means that some people won't be eligible for the third payment even if they received a first or second Economic Impact Payment or claimed a 2020 Recovery Rebate Credit. Payments will begin to be reduced for individuals making $75,000 or above in Adjusted Gross Income ($150,000 for married filing jointly). The payments end at $80,000 for individuals ($160,000 for married filing jointly); people above these levels are ineligible for a payment. More information is available in Fact Sheet 2021-05, Updated details about the third round of Economic Impact Payments.

https://www.irs.gov/newsroom/irs-office-of-chief-counsel-unveils-national-virtual-settlement-days-effort-this-year-to-reach-more-taxpayers-in-more-parts-of-the-nation

IR-2021-61, March 18, 2021 WASHINGTON — The Internal Revenue Service Office of Chief Counsel has embarked on its most far-reaching Settlement Days program ever, declaring the month of March 2021 as "National Settlement Month." This ambitious program builds upon the success achieved from last year's many settlement day events, when Chief Counsel shifted the program to a virtual format due to the pandemic. Virtual Settlement Day (VSD) events will be conducted by every Chief Counsel office across the country and will serve taxpayers in all 50 states and the District of Columbia. "Virtual Settlement Day events enable the IRS to deliver meaningful resolution options to taxpayers as the nation works through the pandemic," said IRS Commissioner Chuck Rettig. "Virtual options are an addition to traditional methods of communication and interaction with taxpayers that the IRS will always make available under normal circumstances." Settlement Days events are coordinated efforts to resolve cases in the United States Tax Court by providing taxpayers who are not represented by counsel with the opportunity to receive free tax advice from Low Income Taxpayer Clinics (LITCs), American Bar Association (ABA) volunteer attorneys and other pro bono organizations. Taxpayers can also discuss their Tax Court cases and related tax issues with members of the Office of Chief Counsel, the IRS Independent Office of Appeals and IRS Collection representatives. These communications can aid in reaching a settlement by providing taxpayers with a better understanding of what is needed to support their case. If settlement is reached, IRS Collection personnel will be available to discuss potential payment alternatives. For those who choose to take their cases to court, the VSD process can also help by giving taxpayers a better understanding of what information they need to present to the court to be successful. Taxpayer Advocate Service (TAS) employees also participate in VSDs to assist taxpayers with tax issues attributable to non-docketed years. Local Taxpayer Advocates and their staff can work with and inform taxpayers about how TAS may be able to assist with other unresolved tax matters, or to provide further assistance after the Tax Court matter is concluded. If a taxpayer experiences difficulties concerning collection, TAS can also assist with collection alternatives. How does one go about participating in a VSD event? One way is to be notified and invited to attend by the IRS working with LITCs and pro bono attorneys. The IRS proactively identifies and reaches out to taxpayers with Tax Court cases which appear most suitable for this settlement day approach. The IRS also generally encourages taxpayers with active Tax Court cases to contact the assigned Chief Counsel attorney or paralegal about participating in the March VSD events. "I strongly encourage all taxpayers who have the ability to participate in a settlement day event to do so because they will understand their own case better while not giving up their day in court if they so choose," Rettig said. This year's VSD program includes several locations where these events have never been offered before, including: Albuquerque, Billings, Buffalo, Cheyenne, Cleveland, Denver, Des Moines, Indianapolis, Little Rock, Milwaukee, Nashville, Peoria, Omaha, Reno, Sacramento, San Diego, and San Jose. Chief Counsel has partnered with LITCs and the ABA to ensure there will be volunteers available to assist taxpayers in all 50 states and the District of Columbia. The IRS first announced virtual settlement days in May of last year. Since then, Chief Counsel and LITCs have successfully used VSD events to help more than 259 taxpayers resolve Tax Court cases without having to go to trial. This saves taxpayers and the government time and money. The legal assistance to taxpayers can potentially help achieve a better resolution to their cases. Of course, the Counsel attorneys or paralegals assigned to cases are always available to settle cases outside of the VSD program. LITCs can contact their local Chief Counsel offices about the event for their area. If additional information is needed, reach out to Chief Counsel's Settlement Day Cadre, or contact Sarah Sexton Martinez at 312-368-8604 (not a toll-free call). Pro bono volunteers are encouraged to contact Meg Newman with the American Bar Association Tax Section at megan.newman@americanbar.org. In addition to local events, volunteers are being matched to serve where there are gaps in service.